By Bharath Rajeswaran
(Reuters) -Indian shares fell on Thursday, a day after additional 25% punitive U.S. tariffs on local imports took effect, with analysts warning of near-term pressure on markets.
The Nifty 50 lost 0.63% to 24,557.1 points and the BSE Sensex shed 0.65% to 80,253.93 as of 9:50 a.m. IST.
All 16 major sectors logged losses. The broader small-caps and mid-caps dropped about 0.9% each.
Heaviest-weighted HDFC Bank declined 1.5%, while ICICI Bank and Reliance Industries retreated about 0.9% each.
Nifty and Sensex fell about 1% each on Tuesday, their sharpest single-day percentage drop in three months, before the U.S. tariffs took effect. Domestic markets were shut on Wednesday due to a local holiday.
According to analysts, markets are facing significant headwinds after the U.S. enforced the extra 25% tariff on Indian goods over New Delhi’s purchase of Russian oil, taking the total duties to 50%.
“The risk due to (the) rift in U.S.-India relations and demanding valuations imply that prospects for Indian stocks are no longer superior to most emerging market peers,” said Amr Abdel Khalek, emerging markets strategist at MRB partners.
Foreign portfolio investors offloaded Indian shares worth $2.66 billion so far in August, the highest outflows since February, on tariff worries and muted earnings.
“The stakes go beyond tariffs. The issue is India’s integration into global value chains,” said Vikram Kasat, head of advisory at PL Capital.
“In the absence of a trade deal with U.S, India risks not just lost exports but diminished investment and slower job creation.”
Among individual stocks, Interglobe Aviation, which operates budget carrier IndiGo, fell 4.3% on reports of co-founder’s discounted stake sale.
Bucking the trend, Hero MotoCorp gained 1.5%, after Jefferies upgraded the stock to “hold” from “underperform” and projected a boost to earnings in auto sector from the proposed cuts to the goods and services tax (GST) rates.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Sonia Cheema)
