Nifty, Sensex Likely to Open Lower on August 8 as US Tariff Hike Weighs on Sentiment

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Nifty, Sensex Likely to Open Lower on August 8 as US Tariff Hike Weighs on Sentiment
Nifty, Sensex Likely to Open Lower on August 8 as US Tariff Hike Weighs on Sentiment

Indian equity markets may start Friday’s session on a muted note, with benchmark indices Nifty 50 and Sensex expected to trade under pressure as global tariff concerns intensify. At 7:30 am, the GIFT Nifty was down 0.2% or 50 points at 24,644, indicating a cautious opening.

On Thursday, Nifty 50 and Sensex staged a strong recovery in the final hour, reversing steep intraday losses to close with marginal gains. The rebound was aided by improved global sentiment following the possibility of talks between the US and Russia. However, early weakness came after US President Donald Trump announced an additional 25% tariff on Indian goods, doubling the total import duty to 50%.

The decision, linked to India’s continued purchases of Russian oil and defence equipment, is expected to impact multiple sectors. The 50% tariff will apply to most Indian exports, except for a small list of exemptions. Despite this, market resilience suggests that investors are still willing to buy on dips.

Key Technical Levels to Watch

·         Immediate Support: 24,450, aligning with a previously tested demand zone.

·         Major Support: 24,500, acting as a pivotal zone for buyers.

·         Resistance: Any recovery above 24,700 could spark short-term momentum.

The Relative Strength Index (RSI) remains near 40 but is showing signs of positive divergence, suggesting that bearish pressure may be easing. Intraday indicators also point to a reversal from oversold territory, potentially opening opportunities for fresh long positions.

Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, noted, “The market’s overall structure is oversold, which means pullbacks could attract fresh buying interest as optimism gradually returns.”

Volatility and Market Outlook

The India VIX declined 2.28% to 11.68, indicating subdued volatility despite heightened trade tensions. Analysts believe that low VIX readings point to a phase of consolidation rather than a sharp sell-off.

Overall, while the tariff hike poses a headwind for sentiment, strong technical support zones and oversold conditions suggest that downside risks may be limited in the near term.

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