What's next for market as Sensex, Nifty extend losses on US tariffs

Domestic equity benchmarks fell for the second consecutive session on Thursday, weighed down by fresh US tariffs on Indian goods. Investors tracked global developments and cautious sentiment prevailed across a majority of all sectors.

At last check, the 30-share BSE Sensex pack was down 574.64 points or 0.71 per cent to trade at 80,211.90, while the broader NSE Nifty50 index declined 153.95 points or 0.62 per cent to 24,558.10 level.

G Chokkalingam, Founder and MD of Equinomics Research, said investors were hoping for a last-minute change of stance by the US President on reciprocal tariffs, but the move went ahead as planned. "Hence, we are seeing a correction in the market for second day in a row. However, the market should bottom out soon as it was largely already discounted by the market, which is prepared to see a maximum 50 bps correction in India’s GDP growth due to these aggressive tariffs," he said.

Chokkalingam added that factors such as a successful monsoon, anticipated GST reforms, a continued reversal in the interest rate cycle and ongoing free trade agreements would help the economy and equity indices remain resilient.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the 50 per cent tariff imposed on India will weigh on sentiment in the near term. "But the market is unlikely to panic since the market will view these high tariffs as a short-term aberration which will be resolved soon," he noted. Citing US Treasury Secretary Scott Bessant's comment that India and the US will eventually come together, he added, "The market will discount this outcome without panicking."

According to Vijayakumar, the bigger challenge for equities lies in high valuations and subdued earnings growth. "The strong pillar of support to the market is the aggressive buying by DIIs flush with funds. Any selling by FIIs will be easily neutralised," he said.

On technicals, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said Nifty50 has taken support around the 24,500 mark. "From there onwards, we can see some buying. One needs to closely watch the mentioned level during the day," he added.