 "Sensex sinks 600 pts, Nifty near 24,400 amid Trump's tough trade talk")
Stock Market today: Indian benchmark indices saw a sharp decline on Friday, as sentiment on Dalal Street took a hit following Trump's recent remarks ruling out any prospects of trade talks with New Delhi.
The BSE Sensex was trading at 80,040 levels, down by 586 points or 0.7 per cent as of 12.15 PM. The index hit an intraday low of 79,990.
Whereas, Nifty50 was down by over 170 points or 0.7 per cent, quoting 24,420 levels. The index logged an intraday low of 24,402. Majority stocks from the Sensex pack were trading in red with Bharti Airtel, Axis Bank, Kotak Mahindra Bank, Adani Ports and Tata Steel among the top losers. On the other hand, Titan, NTPC, Tech Mahindra, Bajaj Finance and Trent were among the few gainers.
Broader markets witnessed a steeper decline. The Nifty Midcap 100 was trading 0.86 per cent lower, quoting 56,449 levels. The Nifty Smallcap, meanwhile, was trading at 17,594, down by 0.56 per cent.
Nearly all sectors were trading in the red territory with Nifty Metal as the worst-performing sectoral index, down by 1.34 per cent, trading at 9,185 levels. Nifty Pharma was down by 0.85 per cent, trading at 21,500.
Why Sensex, Nifty are falling today?
The US President Trump's recent imposition of a 50 per cent tariff rate on India has significantly impacted the market sentiment. Alongside Brazil, New Delhi is now facing the highest tariff rate among its peer nations. Adding to the overall jitters, Trump has ruled out all prospects of trade talks with India amid the ongoing tariff dispute.
During a press conference at the Oval Office, Trump openly said that no further trade negotiations will take place with New Delhi until the tariff issue is resolved, according to ANI. While the already set 25 per cent tariff rate has already come into effect, the additional 25 per cent will be levied later this month. This has dashed all hopes of a prospective trade deal with the US. That apart, multiple sectors, including auto and chemicals, might bear the brunt of tariffs.
"Prima facie, it appears that India’s chemical, textile and auto components sectors are most susceptible to Trump’s tariff actions, and exports of companies herein could be directly impacted. Next in line, we understand, are pharmaceuticals and electronics sectors, which are currently exempted under Section 232 investigations. Further action on this is likely in the near future," Analysts at JM Financial stated in the 'India strategy' report.
SMIDs in red
Broader markets experienced a steeper decline on Friday, with midcap stocks declining by nearly 1 per cent. The Nifty Midcap index hit an intraday low of 56,341, down by 597 points. Nearly all constituents from the index were trading in the red territory with Kalyan Jewellers, Coforge, Mazagon Dock, Biocon, Page Industries and Solar Industries among the top laggards.
Kalyan Jewellers shares dropped over 9 per cent, hitting an intraday low of ₹535 on the National Stock Exchange. Biocon shares were down by more than 5 per cent, logging an intraday low of ₹353.30.
Nifty Smallcap 100 index experienced a similar downtrend. The index was down by 0.63 per cent or 111 points, and hit an intraday low of 17,573.35. Seventy of the index’s 100 constituents were trading in red with Data Patterns, Ramco Cement, Chambal Ferilizers & Chemicals, Birlasoft and Kfin Tech among the top laggards.
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FII Outflow
Foreign institutional investors (FIIs) continued their selling spree in the Indian stock market as valuation concerns, coupled with the 50 per cent tariff threat, pulled down the overall investor sentiment. So far this month, FIIs have remained net sellers in the market, taking their total cash market selling in August to ₹15,950 crore.
While markets did stage some strength on the August 7 (previous trading session) deadline, ignoring Trump's additional 25 per cent tariff threat, set for imposition later this month, market analysts pointed out that the recovery was mainly due to short-covering triggered by the strong buying spree by domestic investors (DIIs).
"The market continues to be technically and fundamentally weak. Continuous lower lows on the Nifty is technically a weak sign. From the fundamental perspective, there are no indications yet of a sharp uptick in earnings for FY26. These weak indicators, along with the relatively high valuations in India, are triggering sustained selling by the FIIs," said VK Vijayakumar, chief investment strategist, Geojit Investments.