The Indian stock market experienced a decline on August 7, 2025, with both the Sensex and Nifty opening lower. The fall is primarily attributed to new tariffs imposed by the U.S. President Donald Trump on Indian goods.

Key Factor: US Tariff Hike

The primary trigger for the market decline is the U.S. decision to impose an additional 25% tariff on imports from India. This effectively doubles the total tariff burden on Indian goods to 50%. The U.S. cites India's continued purchases of Russian crude oil as the reason for this action. This move is expected to put Indian exporters at a disadvantage compared to their global competitors, including China. India has condemned the tariff increase, describing it as "unfair, unjustified, and unreasonable".

Impact on Key Sectors and Stocks

Several sectors are expected to be negatively affected by the increased tariffs. These include:

• Textiles, Marine, and Leather Exports: These sectors are likely to face significant challenges due to the higher tariffs, making their products more expensive in the U.S. market.
• Metal: Nifty Metal fell over 1%, dragged down by companies like Jindal Stainless, Adani Enterprises, SAIL, Hindustan Copper, NMDC and Tata Steel.
• Auto: Auto sector is also under pressure. Major stocks that remained under pressure included Tata Motors.

However, some companies bucked the trend and experienced gains. These include:

• Trent, Titan, Sun Pharma and ITC: These stocks were among the gainers.
• Hero MotoCorp, Cipla, ITC, and Nestle India: These were also among the top gainers in early trade.
• Asian Paints, SBIN and M&M: These were also among the handful of gainers.

Broader Market Trends

The broader market reflected the negative sentiment. The Nifty Midcap100 and Nifty Smallcap250 indices were trading lower. The market breadth was skewed towards the negative, indicating a bearish undertone.

Global Cues

Asian markets traded mixed. Japan's Nikkei 225, and Australia's S&P/ASX 200 were flat, while South Korea's Kospi index dropped. The U.S. markets ended higher on Wednesday.

Expert Outlook

Kotak Securities noted that the short-term market outlook is weak but oversold. They identified 80,300 as a promising support zone for the Sensex, with 81,000 acting as a crucial resistance area. SBI Securities indicated that the RSI on the daily chart is in the bearish zone, suggesting weakening price strength.

Additional Factors

• FII Selling: Foreign Institutional Investors (FIIs) offloaded equities.
• RBI Policy: The domestic equity market ended lower after the Reserve Bank of India (RBI) announced its monetary policy. The RBI's Monetary Policy Committee (MPC) decided to keep the repo rate unchanged.
• Crude Oil Prices: Oil prices edged higher. Brent crude was trading up 0.91 per cent at $67.50 per barrel, while US West Texas Intermediate (WTI) crude was trading with gains of 0.93 per cent at $64.95 per barrel.

In conclusion, the Indian stock market is currently experiencing a downturn primarily due to the imposition of higher tariffs by the U.S. on Indian goods, which has created uncertainty and triggered selling pressure across various sectors.