Indian Stock Market Shows Signs of Caution Today

August 28th, Thursday 

The Indian stock market opened with caution today, Sensex at 80,337.43 (previous close: 80,786.54), down by 0.56%. The Nifty 50 opened at 24,592.25 (previous close: 24,712 ), dropping 0.48%. 

By mid-morning, Sensex picked up a bit and reached 80,540. 

Source: Tradingview

Similarly, Nifty50 also climbed up in the early hours to reach 24,634.

Source: Tradingview

All major sectoral indices faced selling pressure today, and investors seeking refuge found little relief. The BSE Midcap index fell around 0.5% by mid-morning, while the Smallcap index sank nearly 0.5-0.6%. 

Most sectors mirrored the trend set by the headline indices. However, the Indian textile market faced the maximum brunt, owing to the US tariffs. 

Here are the top 3 reasons why the market is facing a setback:

  1. Newly imposed tariffs: The Indian stock market is cautious today, primarily due to the impact of the new 50% US tariffs on Indian exports, particularly in the textiles sector. According to the Federation of Indian Export Organisations (FIEO), nearly Rs 72,000 crore worth of exports are now at risk, raising fears of job losses in a sector employing millions.

    Since the US is India’s largest textile buyer, these steep tariffs directly affect nearly 55% of Indian exports. The tariffs imposed on Indian goods are higher than those faced by rivals such as China, Vietnam, Indonesia, and Japan, prompting concerns that buyers may divert orders away from India to more cost-competitive markets, squeezing export revenues.

    The market adapted to these worries, with textile stocks like S P Apparels, Siyaram Silk Mills, and Raymond among the biggest losers. Although the government has extended the exemption on import duties for cotton until December 31, 2025, easing input costs to some extent, the heavy burden of export tariffs continues to weigh on investor sentiment, amplifying market volatility today.

    2. India Vix spikes at 7%: The India VIX, often referred to as the “fear gauge” of the Indian stock market, surged by approximately 7% today, signaling a sharp rise in anticipated market volatility over the coming month. This spike is indicative of heightened investor caution amid the ongoing global trade tensions and newly imposed US tariffs on Indian goods.

    3. Weak Global Cues: Negative cues from US equity futures and other international markets compounded the pressure. Disappointing results from global tech companies like Nvidia led to a cautious stance worldwide. When global markets are weak, Indian equities typically experience selling due to fears of reduced cross-border capital flows

Let’s have a look at the top 3 gainers and losers:

Here are the top 3 gainers: 

Stock Name Previous Close (₹) Opening Price (₹) Last Trade Price (LTP) (₹) % Change
GSS Infotech Ltd. 28.31 28.31 33.41 18.01%
Dev Information Tech Ltd. 41.58 41.58 47.37 13.92%
Kaushalya Infrastructure Development Corp. Ltd. 960.50 955.40 1,089.90 13.47%

Source: NSE

Top 3 Losers are:

Stock Name (Full) Previous Close Opening Price Last Trade Price (LTP) % Change
Agarwal Industrial Corporation Ltd. 459.95 459.95 433.50 -5.75%
GTL Ltd. 9.82 9.75 9.29 -5.40%
Gayatri Highways Ltd. 1.68 1.60 1.59 -5.36%

Source: NSE

Conclusion

The Indian stock market witnessed a sharp decline in today’s session, with the Nifty 50 and Sensex opening lower and sustaining losses throughout the day. The newly imposed US tariffs were the major driver of the caution, while Indian investors appear to be fearful, as shown by the Indian Vix.

Leave a Reply

Your email address will not be published. Required fields are marked *