Benchmarks tumble as Trump tariffs stoke global trade war concerns

Sensex and Nifty close lower for the fifth consecutive week, marking the longest losing streak in two years, as US tariff announcements dampen investor sentiment globally

Domestic markets tumbled along with global peers as the latest US tariff announcements sparked concerns about global trade and dampened investor sentiment.

 

The benchmark Sensex fell 586 points, or 0.72 per cent, to end at 80,600. The Nifty 50 tumbled 203 points, or 0.82 per cent, to close at 24,565, its lowest level since June 3.

 

Both the indices also capped their fifth straight weekly losses —their longest losing streak since August 2023.

 

Most Asian markets fell with South Korea leading the drop with a near 4 per cent retreat.

 

US President Donald Trump signed an executive order on Thursday, modifying “reciprocal” tariffs on several countries, with analysts warning that more tariff hikes could be on the anvil.

 

 

Analysts are warning of possible backlash from nations that have been hit by Trump’s latest tariffs. Some say the lack of details in the new framework may make it harder for businesses to plan ahead.

 

“It remains to be seen how the tariff dispute will continue and how inflation in the US will develop as a result of the tariffs. With this news, one thing is clear — the issue will continue to occupy us for a long time, and surprises can be expected,” Antje Praefcke, forex analyst at Commerzbank AG, told Bloomberg. 

 

All the sectoral indices compiled by Bloomberg fell excluding Nifty FMCG index which rose 0.7 per cent on safe haven buying.

 

The Nifty Pharma index fell the most at 3.33 per cent after Trump pushed for immediate lowering of charges for existing drugs. He also sought a guarantee that future medicines be launched at par with what other countries are paying. Leading drug exporters Aurobindo Pharma and Sun Pharma tumbled 5 per cent each.

 

The India Vix index rose nearly 4 per cent to 12. The broader market Nifty Midcap 100 and the Nifty Smallcap 100 fell 1.33 per cent and 1.66 per cent, respectively.

 

A day earlier, the domestic equity markets ended their four-month winning streak that stretched from March to June and had propelled benchmark indices nearly 15 per cent higher.

 

Both the Nifty and Sensex ended lower in July (by about 3 per cent).

 

The broader Nifty Smallcap 100 and Nifty Midcap 100 indices dropped 6.7 per cent and 4 per cent, respectively. During the preceding four months, the two indices had jumped over 20 per cent each.

 

Indian equities lagged most global peers in July as sluggish earnings momentum cast a shadow over their already premium valuations compared to other emerging markets.

 

With the exception of fast-moving consumer goods (FMCG) and pharmaceuticals, all sectoral indices ended the month in the red. IT led the declines, sinking by nearly 10 per cent.

 

Foreign portfolio investors (FPIs) offloaded nearly ₹20,000 crore in equities during July, while domestic institutional investors stepped in, purchasing over ₹50,000 crore shares. On Friday, FPIs sold shares worth ₹3,366 crore, while domestic investors pumped in ₹3,187 crore.