Stock markets dive in early trade as steep 50% U.S. tariffs dent investors’ sentiment

Stock market benchmark indices Sensex and Nifty tumbled in early trade on Thursday (August 28, 2025) as the additional 25% tariff imposed by U.S. President Donald Trump on India for its purchases of Russian oil came into effect, weighing on investors’ sentiment. Besides this, foreign fund outflows also dented investors’ sentiment.

The additional 25% tariff imposed by the U.S. on India came into effect on Wednesday (August 27, 2025), bringing the total amount of levies imposed on New Delhi to 50%.

The 30-share BSE Sensex tanked 508.16 points to 80,278.38 in early trade. The 50-share NSE Nifty dived 157.35 points to 24,554.70.

From the Sensex firms, HCL Tech, HDFC Bank, Power Grid, Sun Pharma, NTPC and Bharat Electronics were among the major laggards.

However, Eternal, Asian Paints, Titan, Maruti and Larsen & Toubro were the gainers.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index and Shanghai’s SSE Composite index traded in positive territory while Hong Kong’s Hang Seng quoted lower. The U.S. markets ended in positive territory on Wednesday (August 27, 2025).

“The 50% tariff imposed on India, which has already come into effect, will weigh on market sentiments in the near-term. But the market is unlikely to panic since the market will view these high tariffs as a short-term aberration which will be resolved soon,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

The real challenge before the market is the high valuations and the tepid earnings growth, he said.

“The strong pillar of support to the market is the aggressive buying by DIIs (Domestic Institutional Investors) flush with funds. Any selling by FIIs will be easily neutralised by the aggressive buying by DIIs,” Vijayakumar added.

Global oil benchmark Brent crude dipped 0.76% to $67.53 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹6,516.49 crore on Tuesday, according to exchange data. DIIs, however, bought stocks worth ₹7,060.37 crore.

The domestic equity markets were closed on Wednesday (August 27, 2025) on account of Ganesh Chaturthi.

On Tuesday (August 26, 2025), the Sensex tanked 849.37 points or 1.04% to settle at 80,786.54, and the Nifty dropped 255.70 points or 1.02% to 24,712.05.