India’s equity benchmarks fell for a second straight month in August, as punitive U.S. tariffs on Indian goods are expected to hit economic growth and corporate earnings.
The Nifty 50 index dropped 0.3% to 24,426.85 points at close on Friday, taking the month’s losses to 1.4%. The BSE Sensex declined 0.34% on the day and 1.7% on month. The indexes had lost about 3% in July.
The rupee slid to a record low on Friday, slipping past the 88-per-dollar mark for the first time ever.
In the week, the equity benchmarks lost about 1.8% as Indian markets underperformed their Asian and emerging market peers.
The U.S. on Wednesday imposed an additional 25% tariff on Indian goods over New Delhi’s purchase of Russian oil, doubling the earlier 25% duty.
The tariffs are likely to shave off 60-80 basis points from India’s GDP growth if they stay in place for a year, economists have said, potentially adding pressure on an already slowing economy.
Foreign investors have pulled out $3.3 billion from Indian stocks in August, the heaviest outflow since February, as tariff woes and weak corporate earnings dragged.
Indian stock benchmarks extend losses on US tariff blow
“We don’t expect a sharp selloff from here unless the trade situation worsens,” said Abhishek Goenka, founder and CIO of wealth management firm Billionz.
“But with earnings underwhelming, a prolonged sideways correction cannot be ruled out.”
Equity losses were broad-based, with 12 of 16 major sectors ending with monthly losses.
State-owned enterprises, drug makers, financials and energy stocks were among the top laggards in August.
Small- and mid-cap indexes slid 4.1% and 2.9%, respectively.
However, auto and consumption indexes , rose 5.5% and 2.7% in August, ahead of next week’s meeting of the Goods and Services Tax Council, where sweeping tax cuts will be discussed.
Among individual stocks, Hero MotoCorp jumped 19.4% while Maruti Suzuki climbed 17.3% in August on expectations of tax cuts.
Domestic economic growth data is due after market hours, with growth in April–June expected to slow.
Investors also await a key U.S. inflation reading, due later in the day, for cues on Federal Reserve’s rate outlook.
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