SENSEX drops nearly 700 points, NIFTY50 below 24,600; here are key factors dragging markets

As of 9:57 am, the SENSEX was down 438 points at 80,348, and the NIFTY50 index declined 125 points to 24,586.

Here are key factors dragging markets on Thursday:

50% tariff kicks in

Investor sentiment turned bearish after 50% tariffs on Indian goods imposed by the United States came into effect on Wednesday. The move will adversely impact earnings of companies reliant on exports, especially in the fields of shrimps, textiles, apparels, gems, jewellery, diamonds and footwear, among others, analysts said.

Exporters said the imposition of a 25% penalty on India over and above the 25% tariff move will disrupt the flow of Indian goods to its largest export market.

The US accounted for about 20% of India's $437.42 billion worth of goods exports in 2024-25. The US was the largest trading partner of India from 2021 to 2022.

In 2024-25, the bilateral trade in goods stood at $131.8 billion ($86.5 billion in exports and $45.3 billion in imports).

Expiry day jitters

The markets were witnessing heightened volatility on account of the expiry of NIFTY, Bank NIFTY and stock August futures and option contracts (F&O). Starting with the September F&O series, the expiry of NIFTY, Bank NIFTY and stock futures and option contracts will shift to Tuesday from Thursday, and the expiry of SENSEX will shift to Thursday from Tuesday.

The NIFTY50 has broken a crucial near-term support of the 20 SMA, indicating a bearish trend for the index; however, on a longer-term chart of a monthly period, the NIFTY50 has formed a doji candlestick pattern, indicating the absence of direction in the markets.

On the options data front, the 25,000 calls hold the highest open interest for today’s expiry, indicating crucial resistance for the index. On the other hand, the 24,500 puts hold the highest open interest, indicating crucial support for the index.

Heavyweights drag

HDFC Bank, Infosys, ICICI Bank, Tata Consultancy Services, HCL Technologies, Sun Pharma and Tata Motors were among the top drags on the SENSEX. They collectively wiped out over 350 points from the SENSEX, data from BSE showed.

Sectoral landscape

Selling pressure was broad-based, as all the major sector gauges compiled by the National Stock Exchange were trading lower, led by the NIFTY Realty index's 1.2% fall. NIFTY IT, Pharma, Metal, Bank, Financial Services, Oil & Gas and Private Bank indices also fell between 0.45% and 1.15%.

Broader markets were also facing selling pressure as the NIFTY Midcap 100 index dropped 0.78% and the NIFTY Smallcap 100 index plunged 0.74%.

As many as 73 shares in the NIFTY Midcap 100 were trading lower, while 72 shares in the NIFTY Smallcap 100 were trading with a negative bias.

NIFTY50 gainers and losers

Shriram Finance was the top loser in the NIFTY50 index; the stock fell 2.95% to ₹577. HCL Technologies, Sun Pharma, Tata Motors, Tata Consultancy Services, Infosys, HDFC Bank, Power Grid and Dr Reddy's Labs also fell between 1.4% and 2.6%.

On the flipside, Hero MotoCorp, Asian Paints, Eternal, Adani Enterprises and Adani Ports were among the notable gainers.

The overall market breadth was negative, as 2,123 shares were declining while 1,489 were advancing on the BSE.