Benchmark stock market indices witnessed a decline on Thursday, closing in the red due to a significant fall in energy, metal, and pharma sector stocks. Investor sentiment weakened following the United States' announcement of a 25% tariff, set to be implemented starting August 1. As a result, the S&P BSE Sensex fell by 296.28 points, ending the day at 81,185.58, while the NSE Nifty50 dropped by 86.70 points to settle at 24,768.35.
Vinod Nair, Head of Research at Geojit Financial Services, remarked that the market opened on a negative note, influenced by renewed tariff-related fears. Although there was an attempt at recovery later in the session, the indices ultimately closed with marginal losses, influenced in part by the monthly expiry. He also noted that investors were drawn to domestic, non-discretionary sectors, particularly FMCG stocks, which presented appealing valuations, steady demand, and limited exposure to global tariff pressures.
Market heavyweights were among the biggest drags on the indices. Tata Steel was the top loser, falling by 2.20%, followed by Sun Pharmaceutical Industries with a decline of 1.69%. Adani Ports and Special Economic Zone dropped 1.50%, Reliance Industries slid by 1.39%, and NTPC decreased by 1.37%. In contrast, some stocks managed to record gains. Hindustan Unilever led the pack with a rise of 3.48%, followed by Eternal at 1.40%, ITC with a gain of 1.01%, Kotak Mahindra Bank at 0.96%, and Power Grid Corporation of India at 0.64%.
The broader market showed signs of strain as well. The Nifty Midcap100 index declined by 0.93%, while the Nifty Smallcap100 fell by 1.05%. Volatility also picked up, as indicated by a 3.01% rise in the India VIX. Most sectoral indices ended lower. The Nifty Oil & Gas index led the losses with a 1.48% drop. Nifty Pharma declined 1.31%, Nifty Metal slipped 1.22%, and Nifty Healthcare fell by 1.07%. The Nifty Consumer Durables index also posted a 0.73% loss.
Further, Nifty PSU Bank was down by 0.82%, and Nifty Realty dropped 0.58%. Nifty IT dipped 0.51%, while Nifty Auto and Nifty Private Bank slid by 0.38% and 0.13% respectively. The Nifty Financial Services 25/50 index also closed lower, falling by 0.19%. However, not all sectors were in the red. Nifty FMCG emerged as a standout performer, gaining 1.44%, and Nifty Media managed a modest gain of 0.10%. Nair concluded that despite the cautious tone, the market remained selectively optimistic and retained hopes of a more favourable tariff scenario in the near term.
