Why Sensex, Nifty fell today; US court verdict, India-US trade deal, 500% tariff & more

Stock benchmarks Sensex and Nifty took their losing run to the fifth straight session on Friday amid concerns over likely stalling of the India-US trade deal and amid fears over a likely fresh 500 per cent tariff on countries like India, which buys Russian oil. Stock investors were also cautious ahead of the US Supreme Court verdict on the legality of Trump tariffs. At 1.02 pm, the BSE Sensex was trading at 83,568.13, down 612.83 points or 0.73 per cent. Nifty fell 181 points or 0.71 per cent to 25,689.25.  

500% Trump tariff

Amit Jain, co-founder of Ashika Global Family Office Services said the proposed 500 per cent tariff threat reflects a dramatic escalation in trade policy, not just a punitive measure against oil purchases. 

"Markets will interpret this as a shift toward using trade instruments for geopolitical leverage, which increases risk pricing across equities, currencies, and commodities," he said.

Jain said India’s energy strategy is rooted in securing affordable supply for its 1.4 billion people, and the sharp drop in Russian crude imports from 1.8 million barrels per day to about 1 million shows how policy and market forces are already adjusting. 

"If such extreme tariffs are enacted, the immediate effect would be volatility in sectors linked to US trade, pressure on export competitiveness, and renewed caution in foreign investor flows. But investors should differentiate between headline noise and structural impact. India’s fundamentals remain strong, and portfolios that balance defensives with growth exposures will be better positioned through this uncertainty,” he said.

India-US trade deal stalls

Among trade tensions, the US Commerce Secretary Howard Lutnick in an interview claimed that the trade deal with India is not done because Prime Minister Narendra Modi did not call President Donald Trump. Lutnick said that the whole deal was set up but Modi needed to call Trump for it to reach it conclusion. 

"The whole deal was set up. But let's be clear, it's his (Trump) deal. He is the closer. He does the deal. You just had to have Modi call the President. They were uncomfortable doing it. Modi didn't call. We did trade deals with Indonesia, the Philippines, and Vietnam. We assumed a trade deal with India before them,"  Lutnick said in an interview with Chamath Palihapitiya.

"India remembers the deal we agreed to. I remember it. They tell you agreed to this deal. I told them I agreed then. Not now." 

US court verdict

VK Vijayakumar, Chief Investment Strategist at Geojit Investments said after the sharp correction yesterday triggered by the possibility of about 500  per cent tariff on India under the provisions of the Russia Sanctioning Act approved by President Trump, the market was focused on the verdict expected today from the US Supreme Court on the legality of Trump tariffs. 

"There is a high probability of the verdict going against Trump. But the details are significant: that is, whether it would be a partial striking down of the tariffs or completely declaring the tariffs illegal. The market reaction would depend on the details. If the Supreme Court declares Trump tariffs illegal, there would be a rally in India since India has been the worst affected by the 50 per cent tariffs," Vijayakumar said. 

Vijayakumar in the sharp market pullback this week, even stocks which will not be impacted by any draconian action by Trump have been affected. 

"Segments like financials, consumer discretionary and industrials that have corrected due to the overall market weakness can be accumulated  now for long-term investment," he said.

Stock market fall

Investor wealth, measured by BSE market capitalisation, fell by Rs 3.45 lakh crore to Rs 468.80 lakh crore from Rs 472.25 lakh crore in the previous session. Over the past five trading sessions, total investor wealth has declined by around Rs 12.44 lakh crore.