26 Aug 2025 : Domestic equity markets opened lower on Tuesday, mirroring weak global cues, after the United States announced plans to levy an additional 25% tariff on a wide range of imports. The move, part of escalating trade tensions, triggered concerns among investors about global economic growth and its impact on emerging markets like India.
Market Reaction
At the opening bell, the Sensex dropped over 450 points, while the Nifty slipped below the 24,000 mark. Selling pressure was seen across key sectors including IT, metals, and auto stocks, which are highly sensitive to international trade and currency fluctuations.
Experts noted that the new tariffs are expected to intensify trade frictions between the U.S. and its key partners, raising fears of a potential slowdown in global trade volumes. This has led to heightened volatility in equity markets worldwide, with Asian indices such as the Nikkei and Hang Seng also posting sharp losses.
U.S. Tariff Move
According to reports, the U.S. government announced additional duties on imports worth billions of dollars, targeting products ranging from industrial goods to consumer electronics. The decision is seen as a countermeasure to trade imbalances and to protect domestic industries. However, economists caution that such protectionist measures may disrupt global supply chains and increase costs for businesses and consumers alike.
Sectoral Impact in India
- IT and Technology: Indian IT companies, which earn a significant share of revenues from the U.S., faced selling pressure amid fears of reduced demand and tighter margins.
- Metals: Metal stocks slipped as higher tariffs are likely to weigh on global demand for commodities like steel and aluminum.
- Auto: Automakers, already grappling with input cost pressures, also saw declines as trade restrictions could hit exports.
- Banking and Financials: Largely remained resilient, though analysts warned of possible capital outflows if global risk aversion continues.
Expert Commentary
Analysts believe that while the immediate market reaction is negative, the longer-term trajectory will depend on how other countries respond to the U.S. tariff hike. “If retaliatory measures are announced, we could see a sharper sell-off globally,” said a senior market strategist at a leading brokerage.
Currency markets also reflected the nervousness, with the Indian Rupee weakening against the U.S. dollar, adding to concerns about inflationary pressures from higher import costs.
Outlook
Market watchers expect continued volatility in the near term, with investors closely tracking geopolitical and trade developments. They advise caution and selective buying in defensive sectors such as FMCG and pharma, which tend to be less exposed to external trade risks.
The broader sentiment will likely remain fragile until there is more clarity on whether the trade dispute escalates further or if diplomatic negotiations can ease tensions.
Summary:
Indian equity markets fell sharply after the U.S. announced additional 25% tariffs, triggering global trade worries. IT, metals, and auto stocks led declines as investors