Mumbai: Dalal Street lost steam on Tuesday, with both the Sensex and Nifty tumbling nearly 1% in early trade, a day ahead of the implementation of additional 25% US tariffs announced by former US President Donald Trump.
At 9:40 am, the S&P BSE Sensex dropped 624.03 points to 81,011.88, while the NSE Nifty50 fell 191.85 points to 24,775.90. The market opened sharply lower, witnessing heavy selling pressure across sectors.
Among the limited gainers, Hindustan Unilever rose 0.57%, followed by Infosys up 0.27% and Tata Consultancy Services (TCS) which edged higher by 0.20%.
On the downside, Sun Pharma led the losers, plunging 3.63%, while Adani Ports slipped 1.59%, Power Grid Corporation fell 1.53%, Bharat Electronics Ltd (BEL) declined 1.48%, and Tata Steel dropped 1.47%.
Reasons Behind the Market Decline
Market experts attributed the decline to investor nervousness ahead of the tariff hike.
“As the US tariffs are about to kick in, the market is witnessing some kind of nervousness,” said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities Pvt Ltd. “As long as the Nifty drifts below the 25,000 mark, weakness is likely to persist. Ahead of the holiday, investors are taking a cautious stance, with sectors like gems and jewellery, textiles, and aquaculture among the most impacted.”
Caution also prevailed as traders awaited the outcome of a Prime Minister’s Office (PMO) meeting scheduled later in the day to review the tariff impact.
Sector and Broader Market Performance
The Nifty Midcap 100 index fell 0.97%, while the Nifty Smallcap 100 declined 1.13%. The India VIX, a measure of market volatility, spiked 4.06%.
Among sectoral indices, Nifty FMCG was the only gainer, inching up 0.14%. On the losing side, Nifty Pharma fell 1.50%, followed by Nifty Healthcare at 1.49%, and Nifty Realty at 1.03%. Other major laggards included Nifty Financial Services (-0.94%), Nifty Metal (-0.95%), Nifty Private Bank (-0.92%), Nifty PSU Bank (-0.78%), Nifty Consumer Durables (-0.77%), Nifty Auto (-0.51%), Nifty Oil & Gas (-0.46%), Nifty Media (-0.43%), and Nifty IT (-0.17%).
Expert Outlook
Despite the dip, analysts believe the market retains underlying strength. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “Despite sluggish earnings growth and tariff headwinds, the market continues to show resilience. Sustained domestic institutional investor (DII) buying is offsetting foreign institutional investor (FII) selling, keeping valuations elevated.”
He cautioned investors to be prudent, adding, “Liquidity-driven resilience is likely to continue. However, investors should avoid overpriced smallcaps and focus on largecaps, which remain fairly valued.”
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