The Indian stock market is currently facing headwinds, with the Nifty 50 sliding approximately 7% from its record high. This downturn has sparked concerns among investors, particularly in light of increased tariffs imposed by the United States. The question now is whether these tariffs could trigger a further decline, potentially exceeding 10%.
Recent Market Performance
The Nifty 50 closed at 24,363.30 on August 8, 2025, a decrease of 0.95% or 233 points. This decline reflects a broader selling pressure across the market, with more constituents declining than advancing. Over the past week, the Nifty 50 has decreased by 1.50%, and over the last month, it has shown a 4.51% decrease. However, it's important to note that year-over-year, the index has increased by 0.47%. The decline on August 8th also marked a three-month low for both the Nifty 50 and the BSE Sensex. The Indian stock market is expected to open negatively today, with Gift Nifty trading at 24,644, down 50 points, signaling a slightly negative opening for Nifty.
Impact of Trump's Tariffs
The recent market volatility is partly attributed to the imposition of tariffs by the U.S. President Donald Trump on Indian imports. Initially, a 25% tariff was announced, which was subsequently increased to 50%. These tariffs are viewed as a response to India's continued trade relations with Russia, particularly in the energy sector. Moody's has warned that these tariffs could undermine India's progress in attracting global investment and affect economic growth and inflation.
Certain sectors are more vulnerable to these tariffs, including textiles, chemicals, auto ancillaries, gems, and jewelry. These export-oriented sectors may face reduced demand and jeopardize operations, especially for smaller firms. While the Nifty 50 has limited direct exposure to the U.S., primarily concentrated in IT services which remain exempt from goods-based duties, the sector-specific pressures could still impact overall market sentiment.
Expert Opinions and Analysis
Despite the concerns, some experts believe that the Indian stock market has remained relatively steady due to its broad-based and resilient economy. Gaurav Goel, Founder & Director at Fynocrat Technologies, suggests that while some export businesses will face challenges, the long-term growth story remains intact. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, notes that despite significant selling by Foreign Institutional Investors (FIIs), the market has only drifted down without a major crash.
Anand James, Chief Market Strategist at Geojit Financial Services, suggests potential near-term support levels based on technical analysis, indicating a possibility of a measured upside move. Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking, believes the overall trend remains weak as long as the index trades below 24,800, with any pullbacks likely to face selling pressure.
Future Outlook
The near-term outlook for the Nifty 50 remains uncertain. AI Munafa prediction indicates that the stock is moving downwards and might continue to move down. A continued breach of the 24,440 level could trigger additional downside pressure, while sustaining above the 25,250 level might build momentum towards the 26,000 range. The next few weeks will be crucial in determining whether the Nifty 50 can find support and rebound or if it will experience a further decline. Investors are advised to remain cautious and monitor market developments closely. Monitoring the sixth round of trade negotiations between India and the U.S., scheduled for August 25, will be crucial.
