The Indian stock market witnessed a significant downturn on Tuesday, with the Nifty 50 index falling sharply amid concerns over US tariffs and widespread market weakness. The benchmark index closed near the day's low at 24,712, registering a substantial drop of 256 points.

Market Overview

The Nifty opened with a 68-point gap-down and continued to decline throughout the trading session. The index breached the key support level of 24,800 and fell below its 50-day Exponential Moving Average (EMA), reaching its lowest level since August 14.

Sector Performance

The market weakness was broad-based, with almost all sectoral indices ending in the red. Notable exceptions included:

• FMCG Sector: The Nifty FMCG index managed to buck the trend, emerging as the sole gainer among sectoral indices.
• Auto Stocks: Some auto stocks provided support to the market, with Eicher Motors and Maruti showing resilience.
• Consumer Staples: Hindustan Unilever and ITC also offered some support to the index.

On the flip side, major losers included Shriram Finance, Sun Pharma, and Tata Steel, contributing significantly to the index's decline.

Broader Market Trends

The sell-off was more pronounced in the broader market:

Sectoral indices that faced steep declines included Nifty Realty, Consumer Durables, and PSU Banks.

US Tariff Impact

A key factor influencing the market sentiment was the implementation of additional US tariffs. President Trump announced an increase in duties:

• New Tariff: Additional 25% duty
• Total Levy: Now stands at 50%
• Effective Date: August 27

This move has negatively affected Indian equities, contributing to the overall market weakness.

Technical Outlook

Technical analysts suggest that the Nifty now faces key support levels at 24,600 and 24,400. Resistance is expected around the 24,900-25,000 range.

As the market grapples with both domestic and international factors, investors and traders are advised to exercise caution and keep a close watch on global developments, particularly those related to trade policies and tariffs.

The Indian stock market ended on a positive note, with the Nifty 50 climbing 98 points to close at 24,968.00, while the Sensex advanced 329 points to finish at 81,636.00. The day's rally was primarily driven by strong performance in the IT sector, with paper stocks also showing significant gains following changes in import regulations.

IT Sector Leads the Charge

The information technology sector emerged as the star performer of the day, with the Nifty IT index surging 2.30%. Four out of the top five Nifty gainers were IT companies:

• TCS (Tata Consultancy Services)
• Infosys
• HCLTech
• Wipro

These tech giants saw their stock prices rise between 1.50% to 3.00%, buoyed by positive brokerage coverage. The strong performance of these IT heavyweights played a crucial role in lifting the overall market sentiment.

Paper Stocks Soar on Import Norm Tightening

Paper stocks witnessed a remarkable surge following the government's decision to tighten import norms for the sector. This move led to significant gains for several paper companies:

These stocks experienced substantial jumps, reflecting investor optimism about the potential benefits of the new import regulations for domestic paper manufacturers.

Mixed Performance Across Other Sectors

While IT and paper stocks shone, other sectors showed mixed results:

• Hero MotoCorp and IndusInd Bank gained 1-2%, despite their upcoming exclusion from the Nifty 50 index.
• Vodafone Idea extended its recent positive momentum, closing 5.00% higher.
• Capital market stocks faced some pressure, with BSE Ltd and Angel One declining by 2-3%.

Market Breadth and Overall Sentiment

Despite the gains in the benchmark indices, the broader market sentiment remained somewhat cautious. The market breadth was tilted towards the negative side, with the number of declining stocks outpacing advancing ones at a ratio of 5:4.

This mixed market breadth suggests that while certain sectors and stocks performed well, there was still some underlying weakness in the overall market. Investors may be selectively focusing on specific sectors and stocks rather than displaying broad-based optimism.

As the Indian stock market continues to navigate through various domestic and global factors, investors are advised to keep a close watch on sector-specific developments and regulatory changes that could impact stock performances in the coming days.