Stock Markets Dive on US Tariffs

Mumbai, Aug 28 (PTI) Stock market benchmark indices Sensex and Nifty tumbled in early trade on Thursday as the additional 25 per cent tariff imposed by US President Donald Trump on India for its purchases of Russian oil came into effect, weighing on investors' sentiment. Besides this, foreign fund outflows also dented investors' sentiment.

The additional 25 per cent tariff imposed by the US on India came into effect on Wednesday, bringing the total amount of levies imposed on New Delhi to 50 per cent.

The 30-share BSE Sensex tanked 508.16 points to 80,278.38 in early trade. The 50-share NSE Nifty dived 157.35 points to 24,554.70.

From the Sensex firms, HCL Tech, HDFC Bank, Power Grid, Sun Pharma, NTPC and Bharat Electronics were among the major laggards.

However, Eternal, Asian Paints, Titan, Maruti and Larsen & Toubro were the gainers.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index traded in positive territory while Hong Kong's Hang Seng quoted lower. The US markets ended in positive territory on Wednesday.

"The 50 per cent tariff imposed on India, which has already come into effect, will weigh on market sentiments 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," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

The real challenge before the market is the high valuations and the tepid earnings growth, he said.

"The strong pillar of support to the market is the aggressive buying by DIIs (Domestic Institutional Investors) flush with funds. Any selling by FIIs will be easily neutralised by the aggressive buying by DIIs," Vijayakumar added.

Global oil benchmark Brent crude dipped 0.76 per cent to USD 67.53 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,516.49 crore on Tuesday, according to exchange data. DIIs, however, bought stocks worth Rs 7,060.37 crore.

The domestic equity markets were closed on Wednesday on account of Ganesh Chaturthi.

On Tuesday, the Sensex tanked 849.37 points or 1.04 per cent to settle at 80,786.54, and the Nifty dropped 255.70 points or 1.02 per cent to 24,712.05.