Sensex, Nifty extend losses as markets react to punitive US tariffs

India's benchmark indices, Sensex and Nifty 50, tanked on Thursday as markets assessed the impact of the 50 per cent tariffs imposed by the US on Indian goods, which came into effect a day earlier.

Nifty 50 closed the day at 24,500, down by 0.85 per cent after experiencing early losses. Meanwhile, the BSE Sensex dropped as low as 80,080, dropping by as much as 0.87 per cent. 

The additional 25 per cent tariff imposed by the US on Indian goods came into effect on Wednesday, bringing the total levies imposed on New Delhi to 50 per cent. Equity and forex markets remained closed on Wednesday on account of Ganesh Chaturthi.

"The 50 per cent tariff imposed on India, which has already come into effect, will weigh on market sentiments in the near-term. But the market is unlikely to panic since the market will view these high tariffs as a short-term aberration which will be resolved soon," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Meanwhile, the rupee rose 10 paise to 87.59 against the US dollar in early trade on Thursday, supported by a weaker dollar index and easing Brent crude prices. Besides, the Reserve Bank of India (RBI) stepped in to protect the local unit from crossing its all-time low, further supporting the local unit, according to forex traders.

Brent crude, the global oil benchmark, was trading 0.76 per cent lower at $67.53 per barrel in futures trade. The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to $98.07.

Kitex drop sharply, other Kerala companies mixed
Donald Trump's punitive tariffs on India are expected to severely impact the country's textile sector, as the US remains New Delhi's key export partner. As a consequence, textile stocks were significantly hit during the early trading session on Thursday.

Kitex Garments closed at lower circuit, down by 5 per cent at ₹169.5. The company is expected to be among the hardest hit, as over 90 per cent of its exports are directed to the United States.

Among other stocks, Solve Plastics is down by 4.8 per cent.

In the Kerala-based banking and financial sector, CSB Bank is down by 4.5 per cent, while South Indian Bank has declined by 0.55 per cent. Muthoot Finance is trading 1.06 per cent lower, and Federal Bank is down by 0.37 per cent. Manappuram Finance, on the other hand, is down by 1.47 per cent.

Among other Kerala companies, Cochin Minerals is down by 0.91 per cent, while Cochin Shipyard is down by 2.29 per cent. FACT has dropped by 4.18 per cent, and KSE Ltd is down by 0.77 per cent.