U.S. Tariff Move Drags Sensex, Nifty Lower in Early Trade

Markets decline in early session as foreign fund outflows and weak Asian cues weigh on sentiment Benchmark equity indices slipped in early trade on Tuesday (August 26, 2025), after the United States issued a draft notification to levy an additional 25% tariff on Indian imports. The move triggered concerns over global trade tensions, leading to selling pressure across key sectors.

At the opening bell, the BSE Sensex fell over 300 points, while the NSE Nifty slipped below the 24,500 mark. Market participants noted that persistent foreign institutional investor (FII) outflows, coupled with a weak trend across major Asian markets, further dampened sentiment.

Analysts said that heightened trade tensions could weigh on India’s export-dependent sectors, particularly IT, textiles, and auto components, as higher tariffs may erode competitiveness in the U.S. market. Investors also remained cautious ahead of key global macroeconomic data and domestic GDP figures due later this week.

“Markets are expected to remain volatile in the near term. The combination of weak global cues, foreign fund selling, and uncertainty over trade measures could keep sentiment under pressure,” said a senior market strategist at a leading brokerage firm.

On the sectoral front, banking, IT, and FMCG stocks led the decline, while a few defensive plays such as pharma witnessed mild buying interest. Broader market indices also traded in the red, with midcaps and smallcaps underperforming the benchmarks.

Market watchers believe that any clarity on the U.S. tariff move, alongside signals from the Federal Reserve regarding interest rates, will be key drivers for Indian equities in the coming sessions.