Sensex, Nifty Poised to Decline for Third Straight Session as Trump’s 25% Tariff Escalation Rattles Markets

Mumbai, August 7, 2025: Indian stock markets, including the Sensex and Nifty, are expected to fall for the third day in a row. This negative mood is due to a new announcement by US President Donald Trump, who plans to increase tariffs on Indian goods to 50%. This would add an extra 25% levy on top of the existing tariffs.

The weak start for today’s trading was already hinted at by the Gift Nifty, which was marginally up by 0.09%. As of 8:45 AM, it was trading at 24,558.50.

About the New Tariffs

US President Donald Trump has announced a significant increase in tariffs on goods imported from India, raising them to a total of 50%. This adds an additional 25% levy on top of the existing rate.

The announcement has created uncertainty and caused investors to sell off riskier assets. However, there is still a window for a diplomatic solution, as the new tariffs will only be implemented after a 21-day negotiation period. This gives India and the US time to potentially de-escalate the situation and avoid the full impact of the new tariffs.

Who is Buying and Selling?

Foreign investors, known as Foreign Portfolio Investors (FPIs), were net sellers, pulling ₹4,999 crore out of the Indian stock market.

However, domestic investors, or Domestic Institutional Investors (DIIs), helped to balance this out by buying shares worth ₹6,794 crore.

Market Volatility is Rising

The India VIX, which measures market volatility, went up by 2.11% to 11.96. Although this shows a slight increase in nervousness, the number is still quite low, suggesting that investors are not panicking. Instead, the market seems to be expecting a period of consolidation rather than a sharp crash.

What the Technical Charts Say

The Nifty index is stuck in a narrow range between 24,500 and 24,750. If it falls below 24,500, it could drop further to the 24,300–24,250 level. If it manages to recover, it will face resistance at 24,760.

The Bank Nifty is also facing pressure. It needs to rise above 55,700 to show a real recovery. Support for the index is around 55,100–55,000. A break below this level could see it fall towards 54,300.

Derivatives and Investor Sentiment

The Put-Call Ratio (PCR), a tool used to gauge market sentiment, has fallen from 0.72 to 0.60. This indicates that more investors are betting on the market to go down, a sign of increasing pessimism for the near future.

Insights For Investors: What’s Ahead?

• Tariff concerns may keep markets under pressure
  The news about US tariffs could worry investors for a few more days. It may affect stocks linked to exports and global trade.
• Watch global cues closely
  Any further updates from the US government or new reactions from India could shift market direction.
• DIIs are showing confidence
  Domestic investors are still buying, which is a positive sign and may help cushion some of the downside.
• Volatility may rise, but no panic yet
  The rise in India VIX shows some nervousness, but not panic. Markets might move sideways or see mild corrections rather than a big crash.
• Nifty and Bank Nifty at crucial levels
  Investors should watch the 24,500 level on Nifty and 55,000 on Bank Nifty. Breaking these could lead to deeper falls.

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