Barometers drop in early trade; breadth weak

Domestic equity benchmarks opened with substantial losses on Thursday, snapping a two-day winning streak. The sell-off was triggered after U.S. President Donald Trump announced a 25% tariff on Indian goods, effective August 1, along with an additional, unspecified penalty for India's purchase of items from Russia. Trading could be volatile due to the monthly Nifty50 F&O series expiry today.

The Nifty traded below the 24,750 mark. Barring the Nifty media index, all the other sectoral indices on the NSE traded in red.

At 09:30 IST, the barometer index, the S&P BSE Sensex declined 514.01 points or 0.63% to 80,951.87. The Nifty 50 index lost 143.90 points or 0.57% to 24,713.85.

In the broader market, the S&P BSE Mid-Cap index slipped 0.64% and the S&P BSE Small-Cap index fell 0.59%.

The market breadth was weak. On the BSE 810 shares rose and 2,028 shares fell. A total of 137 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 850.04 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,829.11 crore in the Indian equity market on 29 July 2025, provisional data showed.

Trump Tariffs:

The U.S. President Donald Trump announced on Wednesday that India will face a 25% tariff starting August 1, along with an additional 'penalty' over what he considers unfair trade practices and India's purchases of military equipment and energy from Russia.

The 25% tariff is slightly lower than the 26% rate he declared on 'Liberation Day' for the key trading partner but remains at the higher end of the range he was weighing. On Tuesday, Trump had indicated he was considering a rate between 20% and 25%.

India's Ministry of Commerce and Industry has reportedly said the 'government is studying' the implications of Trump's tariff announcement.

India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months,' the ministry said in a statement. 'We remain committed to that objective.'

Stocks in Spotlight:

Tata Steel rose 0.28%. The company's consolidated net profit surged 116.5% to Rs 2077.68 crore despite 3.1% decline in net sales to Rs 52,744.07 crore in Q1 FY26 over Q1 FY25.

Mahindra & Mahindra (M&M) declined 0.92%. The company reported a 32.4% jump in consolidated net profit to Rs 4,083.32 crore in Q1 FY26 compared with Rs 3,282.63 crore in Q1 FY25. Net sales increased 22.8% YoY to Rs 45,435.88 crore in Q1 June 2025.

Interglobe Aviation (Indigo) added 0.81%. The company's consolidated net profit declined 20.2% to Rs 2176.30 crore despite of 4.7% increase in net sales to Rs 20,496.30 crore in Q1 FY26 over Q1 FY25.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.27% to 6.382 from the previous close of 6.365.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 87.6450 compared with its close of 87.8000 during the previous trading session.

MCX Gold futures for 5 August 2025 settlement shed 0.07% to Rs 98,000.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.04% to 99.54.

The United States 10-year bond yield fell 0.55% to 4.353.

In the commodities market, Brent crude for August 2025 settlement lost 16 cents or 0.22% to $72.31 a barrel.

Global Markets:

Asian markets traded mostly lower on Thursday as after weakness in Chinese economic activity coupled with falling copper prices dampened investor sentiment.

Copper futures witnessed sharp sell-off after Trump said the U.S. will impose a 50% tariff on copper pipes and wiring. The details of the levy, though, fell short of the sweeping restrictions expected and left out copper input materials such as ores, concentrates and cathodes.

China's official NBS Manufacturing PMI dropped to 49.3 in July 2025 from June's three-month high of 49.7, falling short of expectations and marking the fourth consecutive month of contraction in factory activity. It was the steepest decline since January, as output growth slowed, while both new orders and foreign sales saw their sharpest drops in three months.

The Bank of Japan's policy decision remained on investor's radar. Japan's central bank is widely expected to stand pat on short-term interest rates at 0.5% for the fourth consecutive time, when its two-day policy meeting concludes later in the day.

Investors also assessed the U.S.′ blanket 15% tariffs on imports from South Korea. The U.S. President Donald Trump on Wednesday announced that Washington had reached a 'full and complete' trade deal with Seoul, setting blanket tariffs on the country's exports to U.S. at 15%.

The S&P 500 closed lower on Wednesday and gave up its gain from earlier in the session after Federal Reserve Chair Jerome Powell threw some cold water on the prospects of a September rate cut.

The broad market index lost 0.12% to close at 6,362.90. The Nasdaq Composite added 0.15% to 21,129.67, while the Dow Jones Industrial Average fell 171.71 points, or 0.38%, to finish the session at 44,461.28.

The Federal Reserve's rate-setting committee voted 9-2 on Wednesday to hold interest rates steady for the fifth consecutive meeting, with two Fed governors dissenting for the first time in more than three decades.

Fed Chair Jerome Powell's comments after the decision undercut confidence that borrowing costs would begin to fall in September.

The U.S. economic growth rebounded more than expected in the second quarter, but that measurement grossly overstated the economy's health as declining imports accounted for the bulk of the improvement and domestic demand increased at its slowest pace in two and a half years.

The US economy likely grew at an annualized rate of 2.4% in the second quarter of 2025, rebounding from a 0.5% contraction in the first quarter which was the first decline in three years.

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