Analysts expect a marginal dip at open, with sectors like jewellery and textiles facing pressure, but do not foresee a panic-driven sell-off.
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Markets are likely to react cautiously, and analysts do not expect a panic reaction this time around. Gift Nifty at 24,580 indicates a marginal fall of about 50 points for Nifty at open. Although a few sectors‘ stocks, such as jewellery and textiles, may come under pressure, analysts expect the broader market to remain resilient, although the sentiment will be volatile.
US President Donald Trump on Wednesday slapped an additional 25 per cent tariff on India, to be imposed in three weeks, for buying Russian oil. This will be on top of the 25 per cent reciprocal tariff on Indian goods to be implemented from Thursday, raising the total levy to 50 per cent The timing of the new tariffs prompted trade experts to label it as a “bargaining chip” as it will kick in on August 27, just two days after a US team is expected in India for the next round of negotiations on the bilateral trade agreement (BTA).
Analyst views
Emkay Global Financial, in a note, said that the US imposed an effective 50% tariff on India via an executive order. This may not be a done deal, though, as a 21-day off-ramp potentially leaves the door open for negotiations. “As it stands, this could bring exports from affected sectors (textiles/jewellery/auto ancillaries) to a standstill and hurt some of India’s labour-intensive sectors. We, however, see the broader economy staying resilient and remain convinced of a 2HFY26 consumption-led recovery. We would look through any near-term volatility caused by this and buy a substantial dip (of more than 5%),” the domestic brokerage said.
Dhiraj Relli, MD & CEO, HDFC Securities, said: “We expect the markets to fall by 1-2% in knee-jerk reaction, but most would expect a resolution of the same. Impact on GDP will be around 30-40 bps if these tariffs are sustained for a year.”
Derivatives market mood
Meanwhile, trading in F&O markets signals a cautious stance of traders.
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said the derivatives landscape continues to reflect a cautious stance, with call writers significantly outnumbering put writers. The 24,700 strike has seen aggressive call writing, with open interest swelling to 1.51 crore contracts—cementing it as a strong resistance zone. In contrast, the highest put open interest lies at the 24,500 strike, with 87.99 lakh contracts, reinforcing it as immediate support. “Notably, put writers have started migrating to lower strikes, hinting at eroding bullish confidence. Concurrently, the surge in call writing at higher levels indicates consistent supply pressure,” he said, adding that the Put-Call Ratio (PCR) has sharply declined from 0.72 to 0.60, highlighting growing bearish sentiment and a clear dominance of call sellers
Volatility still in check
India VIX rose marginally by 2.11% to close at 11.96. Despite upcoming macro triggers, volatility remains subdued and anchored near the 11 mark — suggesting that the broader market is currently pricing in consolidation rather than a steep correction. This implies that while caution prevails, panic has not yet taken hold, Dhameja added.
Published on August 7, 2025
