Sensex loses 300 points, Nifty down 0.27 per cent as US goes ahead with 50 pc tariff on India

MUMBAI: Domestic equities opened under pressure on Tuesday as the United States Customs Department went ahead with the decision to impose 50 per cent tariffs on Indian goods and published a draft notice. The new tariffs will come into effect from August 27.

The Nifty 50 index opened at 24,899.50, slipping by 68.25 points, or 0.27, per cent, while the BSE Sensex started at 81,377.39, down 258.52 points, or 0.32 per cent.

Though investors had largely factored in the possibility of such steep tariffs, there was hope in the market for a delay or back-channel relief. With the announcement now making the tariffs a reality, investor sentiment weakened in early trade.

Ajay Bagga, banking and market expert, said that investors remain on edge with the secondary tariffs due to be implemented in the US from 12.01 a.m. on August 27. “Those old enough to have seen the post-Pokhran II sanctions on India are convinced the impact of these will be absorbed. The government is expected to provide relief measures to affected exporters while boosting consumption via GST cuts”, he said.

He further added that the government would need to step up export promotion measures and inject a stimulus to support domestic consumers, especially to make up for the expected shortfall from the loss of nearly USD 48 billion of Indian exports to the US.

Market participants are now awaiting the upcoming GST Council meeting scheduled for September 3 and 4. Tax cuts are expected to be announced, likely coming into effect by the end of September, in time for the festive season of Navratri and Diwali. Experts believe such steps could provide the much-needed boost to consumption and offset the export hit.

Broader indices also showed weakness, with the Nifty 100 down by 0.25 per cent, Nifty Midcap 100 lower by 0.33 per cent, and Nifty Small Cap losing 0.12 per cent. All sectoral indices on the NSE opened in the red. Nifty Auto was down 0.11 per cent, Nifty IT lost 0.48 per cent, Nifty Media declined 0.19 per cent, Nifty Pharma slipped 0.32 per cent, and Nifty Private Bank was down 0.19 per cent. The impact of tariffs was visible across the board.

Indian markets will remain closed on Wednesday on account of Ganesha Chaturthi. In other Asian markets, the trend also remained weak. Japan’s Nikkei 225 index slipped more than 1.2 per cent, Singapore’s Straits Times fell 0.24 per cent, Hong Kong’s Hang Seng declined 0.15 per cent, Taiwan’s Weighted Index lost 0.19 per cent, and South Korea’s KOSPI dropped 0.9 per cent. (ANI)