Sensex, Nifty fall as Trump hikes tariffs, FIIs sell; what should you do?

Stock market today: From the Sensex pack, Adani Ports and Tata Motors were the top drags, falling over 2 per cent

Stock market today: Indian benchmark indices Sensex and Nifty were under pressure on Thursday, August 7, 2025. The BSE Sensex breached the 80,000 level and fell 0.9 per cent or 733 points, logging a day’s low at 79,811. Similarly, NSE Nifty50 slipped 230 points or 0.9 per cent to the day’s low at 24,344. 

 

However, at 1:55 PM, the headline indices recouped some losses as the BSE Sensex quoted 79,931.86, down 607 points or 0.76 per cent. The National Stock Exchange (NSE) Nifty50 followed suit and was at 24,381.4, down 191 points or 0.78 per cent.

 

From the Sensex pack, Adani Ports and Tata Motors were the top drags, falling over 2 per cent, followed by Tata Steel, Bajaj Finance, Sun Pharma, and Reliance Industries (RIL) falling over 1 per cent. Conversely, Eternal (Zomato), ITC, and HDFC Bank were the only gainers, rising up to 0.34 per cent. 

 

 

Sectorally, broad based selling was seen as except for Nifty Media, all counters traded in red. Among others, Nifty Metal (down 1.11 per cent), Nifty Realty (down 0.92 per cent), and Nifty Auto (down 0.92 per cent) saw heavy sell-off. 

Here are key reasons why Sensex and Nifty fell today:

Trump threatens India with double tariffs

US President Donald Trump, on Wednesday, threatened to double its tariffs on Indian goods, blaming New Delhi’s continued purchases of Russian crude oil. The US had already announced a 25 per cent tariff on Indian imports, set to come into force from August 7. In addition to that, Trump announced an extra 25 per cent tariff, bringing the total burden to 50 per cent. 

 

The additional 25 per cent duty will apply to shipments arriving after a 21-day window, from August 28 onwards.

 

“I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil,” Trump said in an executive order issued by the White House. The order states that India’s continued oil trade with Russia undermines US national security and foreign policy interests, particularly in relation to the conflict in Ukraine.

 

"The 21-day window for the additional 25 per cent tariff to take effect leaves room for negotiation and an eventual deal with the US. But there is huge uncertainty surrounding the trade policy and to what extent both nations will be willing to make compromises,” said  VK Vijayakumar, chief investment strategist, Geojit Investments Limited.

 

He added: Since uncertainty is high, investors should be cautious in their approach. At least in the near term, export-oriented sectors will remain weak. Domestic consumption themes like banking and financials, telecom, hotels, cement, capital goods, and segments of automobiles will remain resilient."

 

FII selling spree 

Foreign investors continue to remain net sellers in Indian equities. On Wednesday, Foreign Institutional Investors (FIIs) sold a net of ₹4,999.10 crore in Indian equities. In August so far, foreign investors have offloaded ₹8,005 crore in Indian markets, according to data by National Securities Depository (NSDL). 

 

“FIIs are selling as they are concerned about the tariffs being imposed on India, as it will definitely affect domestic exports to America,” said G Chokkalingam, founder, Equinomics Research.  

What should investors and traders do? 

Santosh Meena, head of research, Swastika Investmart, believes that long-term investors should stay the course as the move by Trump hiking tariffs is a part of ongoing global trade tensions and should not get distracted from India's long-term growth potential. Near-term volatility is an opportunity—not a threat—for long-term investors.

 

However, short-term traders should exercise caution as the outlook remains uncertain due to a combination of muted Q1 earnings, stretched valuations, and global trade tensions. Market texture appears weak in the near term, so a defensive and selective approach is advisable. Any significant correction should be seen as a buying opportunity, as earnings momentum is expected to improve from the next quarter onward.

 

Hardik Matalia, derivative analyst - research, Choice Equity Broking advises traders to adopt a cautious "sell-on-rise" strategy amid volatility.

 

“It is prudent to book partial profits during rallies and maintain tight trailing stop-losses to safeguard gains. Fresh long positions should only be considered if the Nifty sustains above the 24,750 level. Overall, the broader market outlook remains cautiously bullish, but close attention to key technical levels and global developments remains essential,” said Matalia.