Sensex, Nifty Set For Weak Start On Tariff Concerns

(RTTNews) - Indian shares may open on a sluggish note Thursday after the United States slapped a 25 percent tariff on India, effective August 1, and threatened further penalty on Russian oil and BRICS.

Analysts said the move will hurt a spate of sectors — from makers of electronics and generic drugs to jewelry and auto component firms.

In another significant development, U.S. President Donald Trump announced a new oil partnership with Pakistan via Truth Social, saying both the nations would jointly develop reserves and hinting that Islamabad may one day supply oil to India.

In its first official response to Donald Trump's 25 percent tariff move, the Indian government said it is examining the implications and remains committed to a fair and balanced trade deal with the U.S.

Benchmark indexes Sensex and Nifty eked out modest gains on Wednesday to extend gains from the previous session after the IMF upgraded its growth forecasts tor India for both 2025-26 and 2026-27, citing strong consumption growth.

However, the rupee slumped 52 paise to close at 87.43 against the dollar amid trade deal uncertainty, month-end demand for dollar and foreign fund outflows.

Foreign Portfolio Investors were net sellers of shares to the tune of Rs 850 crore on Wednesday, while domestic institutional investors net bought shares worth Rs 1,829 crore, according to provisional data.

Asian markets were mixed this morning as investors assessed the U.S.' blanket 15 percent tariffs on imports from South Korea and awaited Bank of Japan's policy decision.

Gold prices rebounded from a one-month low hit in the previous session to trade around $3,300 per ounce as increased trade uncertainty offset reduced expectations of a U.S. Fed rate cut.

Oil prices were slightly lower after three days of gains. The dollar held around a two-month peak ahead of key inflation and labor market data releases.

U.S. stocks fluctuated before ending narrowly mixed overnight as the Federal Reserve left interest rates unchanged in a divided vote and Chair Jerome Powell signaled caution on the likelihood of a rate cut in September.

"Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen," Powell said.

The dollar surged to the highest level since May as data showed U.S. private payrolls increased more than expected July and the economy grew an annualized 3 percent in the second quarter of 2025, rebounding from a 0.5 percent contraction in the first quarter.

The tech-heavy Nasdaq Composite rose 0.2 percent while the S&P 500 slid 0.1 percent and the Dow shed 0.4 percent.

European stocks ended on a flat note Wednesday as investors reacted to a slew of regional data and earnings announcements.

The pan European STOXX 600 ended flat with a negative bias. The German DAX edged up by 0.2 percent, while France's CAC 40 and the U.K.'s FTSE 100 finished marginally higher.