The benchmark indices went through a tough session on Thursday, as there was a significant swing before the market eventually succumbed to selling pressure and closed in the red.
Benchmark plummets
Reacting to 25% tariff imposed by US President Donald Trump, the Sensex slumped nearly 800 points or 1% in early trade. However, it recovered the losses and traded in the green — up over 300 points — briefly during the afternoon session. The index closed 296.28 points, or 0.36%, lower at 81,185.58. The Nifty declined 86.70 points or 0.35%, closing at 24,768.35 on the monthly expiry day. In the Nifty-50 space, 39 stocks closed in the red.
With Thursday’s fall, the Sensex and Nifty lost 2.9% and 2.93%, respectively, in July, snapping their four-month winning streak.
The broader markets were also under pressure, with the BSE Midcap and BSE Smallcap declining 0.70% and 0.85%, respectively. The market breadth remained negative with 2,416 losers versus 1,602 gainers on the BSE. Investor wealth eroded by ₹2.57 lakh crore, bringing the total market capitalisation on the BSE down to ₹449.7 lakh crore.
Despite the fall, experts believe that the 25% tariff plus penalty will have a limited impact on India’s GDP and corporate earnings. There are also hopes that there will be a trade deal between the US and India, sooner than later.
“While the surprise 25% tariff announcement will likely impact earnings if enforced, we think the incremental earnings drag would be relatively moderate,” Goldman Sachs said in its report.
US Tariff rate
The report added that every 5 percentage point increase in US tariff rates could cause an 80-bps incremental hit to MSCI India EPS (earning per share) through direct and indirect channels. “Accordingly, we estimate about a 2% incremental hit to EPS if new tariffs are enforced. While we are not revising our EPS growth forecasts (currently at 12%/14% for CY25/26) pending further announcements, there are moderate downside risks to our estimates.”
Agreed economists at Emkay: “Tariffs will have little impact on India’s 2HFY26E earnings recovery trajectory, as high-weightage sectors such as financials, consumption, and technology remain unaffected. There may be a short-term selloff, as markets are already fragile due to weak earnings momentum (1QFY26 numbers have been tepid) and limited valuation comfort.”
Sectors such as telecom, oil & gas, energy, metals, and healthcare – expected to be more affected by higher tariffs — were among the top laggards, falling up to 1.80%. In contrast, FMCG and services sectors emerged as top gainers, while banks and financials remained relatively unaffected.
Top Sensex losers included Tata Steel, Sun Pharma, Adani Ports, Reliance Industries, and NTPC, falling up to 2.2%. On the other hand, HUL, Eternal, ITC, Kotak Mahindra Bank, and Power Grid were the top gainers, rising as much as 3.5%.
FPIs sold shares worth Rs 5,588.91 crore while DIIs bought shares worth Rs 6,372.71 crore, provisional BSE data showed.