Sensex, Nifty Decline After US Tariff Blow; HUL Gains on Profit Beat

Mumbai, July 31: Indian equity benchmarks concluded Thursday’s trading session in negative territory, bringing an end to a two-day winning streak. The market downturn was primarily influenced by escalating geopolitical tensions and the announcement of fresh tariff impositions by the United States.

Trump’s 25% Tariff Sparks Market Sell-off

Market sentiment experienced a significant blow after US President Donald Trump declared a 25% tariff on all Indian imports, effective 1st August. This was coupled with an unspecified penalty for India’s purchases of crude oil and defence equipment from Russia. The announcement sent shockwaves across Dalal Street, leading to early morning panic selling among investors.

Benchmark Indices End in Red

• BSE Sensex fell 296.28 points or 0.36% to close at 81,185.58
• Earlier, the index had plunged over 786 points to an intraday low of 80,695.15
• NSE Nifty declined 86.70 points or 0.35% to settle at 24,768.35

The losses came despite some intraday recovery in the latter half of the session.

Top Drags and Gainers

The market’s decline was predominantly led by heavyweight stocks. Among the top laggards were Tata Steel, Sun Pharma, Reliance Industries, Adani Ports, NTPC, and Asian Paints.

On the other hand, Hindustan Unilever Ltd (HUL) stood out as a notable gainer, registering a 3.48% increase. This positive movement for HUL followed its report of a 5.97% rise in Q1 FY26 consolidated net profit, reaching ₹2,768 crore, which was driven by benefits from tax re-estimation. Other companies that saw gains included ITC, Kotak Mahindra Bank, Power Grid, and Eternal.

Global Market Snapshot

Globally, Asian markets presented mixed cues, with South Korea’s Kospi, China’s Shanghai Composite, and Hong Kong’s Hang Seng all ending lower. However, Japan’s Nikkei 225 managed to post gains. European markets were trading mixed during their mid-session, while US markets had closed mostly lower on Wednesday, ahead of the anticipated tariff announcement.

Other Market Highlights

• Brent crude slipped 0.74% to USD 72.70 per barrel, easing inflationary concerns slightly.
• Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth ₹850.04 crore on Wednesday.

Previous Session Recap

On Wednesday, the Sensex had closed 143.91 points higher at 81,481.86, while the Nifty had added 33.95 points to finish at 24,855.05, driven by gains in infrastructure and banking stocks.

Insights For Investors

• US Tariffs Trigger Uncertainty: The 25% US tariff on Indian imports and penalties on Russian-linked purchases may weigh heavily on export-driven sectors and global investor sentiment.
• Volatility May Persist: Geopolitical tensions and trade concerns are likely to increase short-term volatility; cautious positioning is advised.
• FIIs Remain Bearish: Continued selling by Foreign Institutional Investors (FIIs) indicates weakened confidence in Indian equities, at least temporarily.
• Defensive Stocks Outperform: HUL’s rise on strong profit shows investors may rotate towards defensive and consumer staples amid uncertainty.
• Watch Crude Oil Prices: Falling Brent crude could ease inflation concerns and support rate-sensitive sectors like banking and autos.
• Short-Term Caution, Long-Term Selectivity: While near-term weakness is likely, long-term investors can consider selective buying in fundamentally strong sectors after clarity on US-India trade relations.

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