The Indian stock market is currently facing turbulence, with the Nifty 50 index recently closing below its 100-day Exponential Moving Average (EMA). This development, coupled with the imposition of new tariffs by the Trump administration, has created uncertainty for investors.

Impact of Trump Tariffs

The recent imposition of 50% tariffs on Indian goods by the US has negatively impacted market sentiment. On August 28, 2025, the Nifty 50 and Sensex both opened lower, reflecting investor concerns about the potential economic consequences of these tariffs. Sectors such as gems and jewellery, textiles, and leather are expected to be particularly affected.

According to Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, the tariffs are likely to weigh on market sentiment in the near term. However, he also suggests that the market is unlikely to panic, viewing the high tariffs as a short-term issue that will eventually be resolved. U.S. Treasury Secretary Scott Bessant's comment that the "India and US will come together” indicates a likely resolution.

Technical Analysis

Technical analysis of the Nifty 50 provides a mixed outlook. Some analyses suggest a "strong sell" signal based on moving averages and technical indicators. The index has broken the floor of a rising trend channel, indicating a weaker rising rate. It is currently moving within a rectangle formation, with support at 22450 and resistance at 25508. A decisive break through either of these levels will indicate the new direction for the index. The index is approaching resistance at 25000 points, which may trigger a negative reaction.

However, other analyses offer a more neutral or even positive outlook. An overall neutral rating is indicated by oscillators. The long-term trend remains positive, with the index in a rising trend channel.

Market Outlook and Investor Strategy

The Indian stock market's outlook appears cautiously bearish to sideways. The Nifty 50 is currently trapped between crucial support and resistance levels. A breakout above 25,160 could trigger momentum buying, while a breakdown below 24,840 may invite fresh selling pressure.

Given the current market conditions, investors are advised to adopt a cautious stance and closely monitor both global and domestic triggers. Some experts suggest that investors consider shifting from overvalued small-cap stocks to fairly valued large-cap stocks, with a focus on domestic consumption.

Long-Term Perspective

Despite the current headwinds, the long-term outlook for the Indian stock market remains positive. Factors such as strong domestic flows, a stable macroeconomic environment, and a recovering economy are expected to support the market in the coming years. Corporate earnings growth is also projected to accelerate.

The Indian government is actively working to mitigate the impact of the tariffs by diversifying export markets and boosting domestic demand. While the tariffs may cause short-term pain, the Indian economy's healthy growth outlook is expected to limit the long-term impact.

Overall, the Indian stock market is navigating a challenging period marked by trade tensions and technical pressures. While caution is warranted in the short term, the long-term prospects for the market remain compelling.