Indian Stock Markets Brace for Volatility as Trump’s 50% Tariff on Indian Goods Shakes Investor Sentiment

New Delhi, Aug 10: Indian equity markets are poised for another turbulent week as concerns mount over US President Donald Trump’s announcement of a 50% tariff on Indian goods. Investors are also awaiting key domestic inflation data for July, with the Sensex and Nifty already reeling from six consecutive weeks of losses.

During the week ended Friday, the BSE Sensex fell 1.01% to 79,857.79, while the NSE Nifty declined 1.20% to 24,363.30. The tariff move has hit export-focused sectors hard, with pharma and IT stocks seeing the sharpest selling as foreign institutional investors (FIIs) turned net sellers.

“The dominant driver of the week’s decline was the sudden escalation in US tariffs,” said Ajit Mishra, Senior Vice President – Research, Religare Broking Ltd. “Near-term market direction will be shaped by clarity on US tariff implementation, India’s diplomatic response, and incoming inflation readings.”

Vinod Nair, Head of Research at Geojit Financial Services, noted that the market closed at a three-month low amid worries over the impact of US tariffs on exports. The Reserve Bank of India’s decision to keep the repo rate unchanged at 5.50% did little to improve sentiment.

This week, traders will closely track Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation data, developments in US-India trade talks, and earnings from Ashok Leyland, ONGC, IOC, Hindalco Industries, and BPCL.

Siddhartha Khemka, Head of Research – Wealth Management, Motilal Oswal Financial Services, said, “We expect equities to remain in consolidation mode until there is clarity on the tariff front. In this volatile environment, investors may focus on domestic-oriented themes, while traders should keep positions light.”