Indian equity markets are poised for a volatile session on Thursday, August 28, as investors brace for the fallout from a new 50% tariff imposed by the United States on Indian exports.
The move, which came into effect on August 27, follows an additional 25% duty announced by US President Donald Trump, aimed at penalizing India for its continued oil trade with Russia.
Markets remained closed on Wednesday due to Ganesh Chaturthi, but volatility is expected to resurface in Thursday’s expiry session, influenced by global cues and lingering trade tensions.
Stock Market Outlook for August 28
Ahead of the midweek holiday, Indian markets witnessed a sharp sell-off on August 26. The Sensex plunged by 849.37 points, closing at 80,786.54, while the Nifty fell 255.70 points to settle at 24,712.05.
Sectorally, the broader market was under pressure, with all indices except FMCG ending in the red. Notable gainers included Eicher Motors, HUL, Maruti Suzuki, Nestle India, and ITC. Meanwhile, stocks like Shriram Finance, Sun Pharma, Tata Steel, Bajaj Finance, and Trent were among the top losers.
Export-heavy sectors-textiles, gems and jewellery, leather, shrimp, animal products, chemicals, and electrical and mechanical machinery-are likely to be most impacted by the tariff hike. However, pharmaceuticals, energy products, and electronic goods are expected to remain unaffected.
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Analysts believe the market may open lower on Thursday but ruled out panic selling. On August 26, foreign institutional investors (FIIs) sold equities worth Rs 6,516.49 crore, while domestic institutional investors (DIIs) countered the sell-off with purchases amounting to Rs 7,060.37 crore, easing some downward pressure.
“India’s equity markets experienced a shift in trading dynamics, with cash market turnover slipping to a six-month low, falling below Rs 1 lakh crore. The decline in cash market activity marked the second consecutive month of weakness, reflecting the absence of a strong rally that had previously fuelled momentum-driven trading………………the continuing global uncertainty around trade issues, primarily tariffs, also led to a weakening of sentiment in the market. Importantly, despite the softness in trading volumes, the domestic liquidity story remains robust,” said Mr. Puneet Singhania, Director at Master Trust Group.
Sensex, Nifty Prediction Today
The Nifty index has shown signs of further weakness after breaking below the critical support level of 24,800 and slipping under its 50-day Exponential Moving Average (EMA). This technical breach, combined with a bearish crossover in the Relative Strength Index (RSI), suggests a slowdown in price momentum and signals a potential continuation of the downward trend.
Looking ahead, resistance for the Nifty is expected to be in the range of 24,800 to 25,200, while immediate support lies between 24,600 and 24,300. Notably, the highest call writing was observed at the 24,800 strike price, with a volume of 1.8 crore contracts. The recent price breakdown has also formed a long bearish candle on the daily charts and a lower top pattern on intraday charts, reinforcing the bearish outlook in the short term.
Bank Nifty Movement and Outlook
The Bank Nifty index is currently trading on a negative note at around 54,450. Its movement on August 28 will likely be driven by global market cues and investor sentiment. The key level to watch will be 55,000-if the index can reclaim this level, some recovery may be expected. However, if it slips below 54,800, further downside could be on the cards.
Resistance for Bank Nifty is projected in the range of 55,000 to 55,600, while support is likely to be found between 54,800 and 54,300. The highest call writing was recorded at the 55,000 strike, with approximately 23.8 lakh contracts, indicating significant market interest at that level. Traders holding short positions are advised to maintain them, using a stop-loss set at Rs 55,230 on a daily closing basis.
Stock-Specific Predictions for August 28
Among individual stocks, Adani Total Gas Limited (ATGL) appears technically strong above Rs 636 but may turn weak if it slips below Rs 630. Delhivery is expected to show strength above Rs 480 and weakness below Rs 475. Similarly, Granules is likely to perform well above Rs 470, but a fall below Rs 465 could signal weakness. TCS (Tata Consultancy Services) remains strong above Rs 3,165, while it may lose momentum if it drops under Rs 3,135.