30 Aug 2025

Indian Markets Likely to Open Weak Amid 50% US Tariffs and F&O Expiry Pressure

Indian equity markets are expected to start on a negative note on Thursday, weighed down by monthly F&O expiry and cautious investor sentiment after U.S. President Donald Trump’s 50 percent tariffs on Indian goods came into effect on August 27, 2025. Continuous selling by foreign portfolio investors (FPIs) may further dampen market mood.

Key Factors to Watch:

  • India-Africa trade crosses USD 100 billion: Union Minister Kirti Vardhan Singh announced that India-Africa trade surpassed USD 100 billion in 2024-25, making India one of the top five investors in the continent.

  • Commercial vehicle growth outlook: Rating agency ICRA projected commercial vehicle dispatches to dealers to rise by 3-5% year-on-year in FY26.

  • Export diversification push: In response to steep US tariffs, the Commerce Ministry will hold meetings this week with exporters from chemicals, gems, jewellery and other sectors to explore new markets.

  • EU trade talks: European Trade Commissioner Maros Sefcovic is expected to visit India next month to review progress in free trade agreement negotiations with Commerce Minister Piyush Goyal.

  • Employment growth in industries: Annual Survey of Industries (ASI) data showed industrial employment rose 5.92% to 1.95 crore in FY24, compared to 1.84 crore in FY23.

Global Market Cues:
US markets closed higher on Wednesday, despite President Trump’s removal of Fed Governor Lisa Cook, as investors awaited Nvidia results. Asian markets traded mostly in green on Thursday, mirroring positive Wall Street cues.

Domestic Market Performance:
On Tuesday, Indian benchmarks ended sharply lower due to selling pressure after the US proposed an additional 25% tariff on Indian goods. The BSE Sensex fell 849.37 points or 1.04% to close at RS. 80,786.54, while the CNX Nifty dropped 255.70 points or 1.02% to settle at RS. 24,712.05.

Other Developments in Trade:

  • India-Fiji strengthen defence ties: India and Fiji signed seven pacts and finalized an action plan to deepen defence cooperation, with both countries pledging to work for a peaceful Indo-Pacific.

  • Corporate performance: RBI data showed listed private non-financial companies (NFCs) reported a modest sales growth of 5.5% in Q1FY26, compared to 6.9% in the same quarter last year.

  • Auto dealers urge GST reform: Industry body FADA called for the early implementation of the revised GST regime to prevent festive season losses, as buyers are postponing purchases in anticipation of lower prices.