Indian benchmark indices witnessed a sharp decline on Tuesday, driven by concerns over potential additional tariffs from the United States. The BSE Sensex dropped 849.37 points (1.04%) to close at 80,786.54, while the NSE Nifty50 fell 255.70 points (1.02%) to end at 24,712.05.

US Tariff Concerns

The selloff was primarily triggered by reports that the United States is preparing to impose an additional 25% tariff on Indian goods, effective Wednesday. This move would bring the total tariffs on Indian exports to the US to a substantial 50%. The US Department of Homeland Security cited India's continued purchase of Russian crude oil as justification for this action.

Broad-Based Decline

The market decline was widespread, with 2,891 stocks falling versus 1,220 advancing. The BSE MidCap index fell 1.30%, while the SmallCap index experienced a steeper drop of 1.70%.

Sector Performance

Most sectors felt the impact of the selloff:

• PSU Banks, Metals, Pharma, Oil & Gas, Consumer Durables, Realty, and Telecom sectors lost between 1-2%.
• The FMCG sector was the sole exception, bucking the downward trend.

Top Gainers and Losers

Despite the overall negative sentiment, some stocks managed to gain:

On the other hand, major losers included:

Market Volatility and Currency Impact

The India VIX, a measure of market volatility, jumped 3.70% to 12.19, indicating increased uncertainty in the market. The Indian rupee also felt the pressure, weakening 0.18% to trade near 87.75 against the US dollar.

Gold Prices

In contrast to the equity market, gold prices saw gains:

• Comex gold futures rose by $6 to reach $3,372.00
• MCX gold prices increased by ₹200 to ₹100,850.00

The sharp decline in Indian markets highlights the sensitivity to global trade tensions and geopolitical factors. Investors will likely be closely monitoring further developments in US-India trade relations and their potential impact on various sectors of the Indian economy.

The Indian stock market showed signs of recovery last week, breaking a six-week losing streak as the benchmark Nifty index closed 1% higher at 24,631.30. As investors gear up for the new trading week, several crucial factors are expected to influence market sentiment and direction.

Global Developments

International events continue to play a significant role in shaping market dynamics. Talks between former U.S. President Trump and Russian President Putin regarding the situation in Ukraine have reportedly reached an understanding, although a ceasefire deal remains elusive. This development could potentially impact global market sentiment.

Domestic Policy Changes

On the domestic front, Prime Minister Narendra Modi has announced GST rate cuts on everyday goods, with implementation expected by Diwali. This move could boost consumer spending and potentially benefit various sectors of the Indian economy.

U.S. Market Performance

The performance of U.S. markets last week was mixed:

• Dow Jones Industrial Average: +0.08%
• S&P 500 and Nasdaq: Experienced declines

This indicates a cautious sentiment in global markets.

Corporate Actions and IPOs

The week ahead is packed with corporate events:

• Approximately 100 companies have scheduled corporate actions, including dividend payouts.
• Notable companies offering dividends include JK Paper, Coal India, Hindustan Aeronautics Limited (HAL), and Indian Railway Catering and Tourism Corporation (IRCTC).
• Six initial public offerings (IPOs) are set to launch, including Patel Retail and Vikram Solar, which could attract investor attention.

Foreign Institutional Investors (FIIs) Activity

FIIs continue to be net sellers in the Indian market:

This sustained selling pressure from foreign investors remains a concern for market stability.

Technical Outlook

From a technical analysis perspective:

• Support: 24,350
• Resistance: 24,700-24,800 range
• The index has reclaimed its 100-day moving average at 24,560, which now serves as immediate support.

Currency and Commodity Markets

• Indian Rupee: Closed at 87.55 against the U.S. dollar
• Crude Oil: U.S. West Texas Intermediate (WTI) ended at $63.14 per barrel

The decline in crude oil prices could potentially benefit oil-importing countries like India.

Conclusion

As the market opens for a new week, investors and traders will be closely monitoring these factors. The recent positive momentum, breaking the six-week losing streak, provides a glimmer of hope. However, the interplay of global events, domestic policy changes, and technical factors will be crucial in determining the market's direction in the coming days.

Investors are advised to approach the market with caution, keeping an eye on both global and domestic developments that could sway sentiment and impact various sectors of the Indian economy.