Market Wrap: SENSEX, NIFTY post worst day in over three months, investors lose ₹6 lakh crore after US notifies additional tariff on India

The SENSEX dropped 849 points, or 1.04%, to close at 80,786.54, and the NIFTY50 index plunged 256 points, or 1.02%, to close at 24,712.05. The last time benchmarks dropped over 1% was on May 20, data from stock exchanges showed.

With Tuesday's fall in markets, investors' wealth worth ₹6.03 lakh crore got eroded, data from BSE showed.

"Indian equities came under pressure as concerns over US trade policy dampened sentiment after Washington issued a draft notice proposing tariffs of up to 50% on Indian exports, effective from Wednesday," Ashika Institutional Equities said in a note.

"The highest call open interest was concentrated at the 25,000 and 24,800 strike prices, while significant put open interest was seen at the 24,700 and 24,800 strikes. The put–call ratio (PCR) stood at 0.67, reflecting a cautious undertone among market participants," Ashika Institutional Equities added.

The sharp fall came after the US Administration notified that an additional 25% tariff on Indian imports will be imposed on August 27. The duties will take effect from 12:01 am Eastern Daylight Time (EDT).

According to the Department of Homeland Security, a specified rate of duty on imports of articles that are products of India will be imposed.

"The duties set out in the Annex to this document are effective with respect to products of India that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time, on August 27, 2025," the notification stated.

Selling pressure was broad-based, as all the major sector gauges compiled by the National Stock Exchange ended lower, led by the NIFTY Realty index's over 25% decline. NIFTY PSU Bank, Bank, Pharma, Metal, Private Bank, Financial Services and Oil & Gas indices also fell between 1.25% and 2%.

On the other hand, FMCG shares, which are more reliant on domestic consumption, witnessed buying interest. The measure of FMCG companies on the NSE ended nearly 1% higher.

Broader markets also faced the heat of selling pressure as the NIFTY Midcap 100 index dropped 1.62% and the NIFTY Smallcap 100 index fell over 2%.

In the NIFTY Midcap 100 index, 88 shares closed lower, while in the NIFTY Smallcap 100 index, 90 stocks closed with a negative bias.

Shriram Finance was the top loser in the NIFTY50 index; the stock fell 4.03% to close at ₹595.85. Sun Pharma, Tata Steel, Bajaj Finance, Trent, Bajaj Finserv, Coal India, Reliance Industries, Adani Ports and Dr Reddy's Labs also fell between 2% and 3.35%.

On the flip side, Eicher Motors, Hindustan Unilever, Maruti Suzuki, ITC, Nestlé India and TCS were among notable gainers in the NIFTY50 index.

The overall market breadth was extremely bearish, as 2,891 shares ended lower while 1,220 closed higher on the BSE.