The Indian benchmark indices, the BSE Sensex and the NSE Nifty, ended lower on Tuesday as sentiment was dampened after U.S. President Donald Trump announced plans to substantially hike tariffs on Indian goods, specifically as retaliation for India’s continued oil imports from Russia. The market also witnessed cautious trading ahead of tomorrow’s crucial monetary policy announcement, with rate-sensitive banking, financial services, and realty stocks facing selling pressure during the session. In contrast, auto stocks continue to gain traction from July volumes.

The BSE Sensex ended 308.47 points, or 0.38%, lower at 80,710.25, while the NSE Nifty50 settled at 24,649.55, down 73.20 points, or 0.30%. During the session, the 30-share Sensex declined by as much as 464 points, or 0.57%, to hit an intraday low of 80,554.40, while the Nifty50 slipped 132 points, or 0.53%, to touch a day’s low of 24,590.30.

The broader market also mirrored the weakness in benchmark indices and ended on a bearish note. The Nifty Midcap100 index ended 0.39% lower, while the Nifty Smallcap100 fell 0.16%.

On the sectoral front, most indices ended in the red, with pharma, FMCG, and realty among the top losers.

"Despite positive global cues, domestic markets remained range-bound in negative territory. Oil & gas stocks led the decline amid concerns about future import restrictions on Russian oil. Weakness persisted on pharma and IT stocks that are among the largest exporters to the US. Sentiment was also weighed [down] by INR depreciation,” said Vinod Nair, Head of Research, Geojit Investments.

“Investors are now awaiting the upcoming RBI policy decision, where the market has marginal expectations of a rate cut, in the near-term. Currently, the preferences of investors are for domestic consumption-driven stocks and sectors holding limited volatility to external factors," he said.

Among the BSE Sensex pack, 13 out of the 30 stocks ended in the negative, led by Adani Ports, Reliance Industries, Infosys, ICICI Bank, and Eternal (Zomato), falling in the range of 2.4% to 1%.

On the other hand, Titan, Maruti Suzuki India, Trent, Bharti Airtel, and Bajaj Finance were among the Top 5 gainers, rising by up to 2.2%.

The market breadth was negative, with 2,301 of the 4,197 stocks traded on the BSE declining, while 1,745 advanced and 151 ended unchanged. As many as 128 stocks hit their 52-week highs, while 101 touched their 52-week lows. Besides, 267 stocks were locked in their upper circuit limit, and 223 slipped to their lower circuit limit.

In the derivatives segment, the market breadth was also bearish, as the advance-decline ratio remained negative. Open interest surged in names such as Nuvama, Uno Minda, Paytm, Angel One, and Exide Industries, indicating heightened activity and potential volatility in these stocks, said Ashika Institutional Equities in a note. Overall, participants stayed on the sidelines, awaiting cues from the policy outcome to chart the next market move.

Technically, the Nifty traded with a negative bias throughout the day, remaining below the 50 exponential moving average (EMA). “On the daily chart as well, the index is comfortably placed below the 50EMA. The current range is 24,400–24,850, and in the short term, the index is likely to remain within this band. Only a decisive move beyond this range might determine the next course of action for the market," said Rupak De, Senior Technical Analyst at LKP Securities.

Ajit Mishra, SVP-Research, Religare Broking, said lingering uncertainty over the tariff situation, following recent statements from the US President, along with a lack of major positive surprises from the earnings season, has been weighing on market sentiment.

“All eyes are now on the outcome of the upcoming MPC meeting. While the committee is expected to hold rates steady amid global uncertainties, the tone of their commentary will be crucial,” he said.

Amid this corrective phase, select stocks across sectors are showing noticeable strength and offering buying opportunities. Participants should therefore maintain a stock-specific approach and focus on prudent position sizing, said Mishra.

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