Tariff Tensions Drag Markets: Sensex, Nifty End Lower Amid Trade Deal Jitters

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Indian equity markets closed in the red on July 2, as uncertainty over the India–US trade pact and global macro headwinds weighed heavily on investor sentiment. The Sensex fell 288 points to settle at 83,409.69, while the Nifty 50 declined 88 points to 25,453.40, snapping a brief recovery streak.

The downturn was triggered by U.S. President Donald Trump’s firm stance on not extending the July 9 tariff deadline, raising fears of a breakdown in trade negotiations. This, coupled with vague signals from Fed Chair Jerome Powell on rate cuts, spooked global markets and led to a risk-off mood.

Key Highlights:

- Sensex and Nifty 50 declined 0.34% and 0.35% respectively, led by losses in banking, auto, and energy stocks.

- HDFC Bank, L&T, and Reliance Industries were among the top drags.

- Foreign Institutional Investors (FIIs) sold equities worth ₹1,970 crore, continuing their exit for the second session.

- Domestic Institutional Investors (DIIs) provided some support but couldn’t offset the selling pressure.

- India VIX rose 3.5%, indicating heightened market volatility.

- The rupee weakened to 85.63 against the US dollar, raising concerns over imported inflation.

- Brent crude edged up to $67.15 per barrel, adding to inflationary worries.

- Mid and small-cap indices also ended in the red, reflecting broad-based weakness.

- Technical charts suggest Nifty may test 25,300 if bearish momentum persists.

- Global cues remained mixed, with Asian markets largely subdued and US indices offering no clear direction.

With geopolitical risks and macroeconomic uncertainty looming, traders are expected to remain cautious ahead of the July 9 tariff deadline.