Why Are Indian Stock Markets Plummeting? Insights on Recent Declines
Market Overview: A Sharp Decline
Mumbai: The equity markets, represented by the Sensex and Nifty indices, experienced a significant downturn for the second consecutive day on Friday. This decline was primarily driven by substantial losses in sectors such as metals, IT, and telecommunications, amid growing trade concerns and a wave of selling in global markets.
Experts noted that ongoing sell-offs by foreign investors further contributed to the negative sentiment.
In a day marked by volatility, the 30-share BSE Sensex fell by 585.67 points, or 0.72%, closing at 80,599.91. At one point, it had dropped as much as 690.01 points, reaching a low of 80,495.57.
Similarly, the 50-share NSE Nifty decreased by 203 points, or 0.82%, settling at 24,565.35.
The situation was exacerbated by US President Donald Trump's announcement of new tariffs affecting numerous countries, including a 25% duty on goods imported from India. This move signals a shift towards American protectionism, raising concerns about potential disruptions in global trade.
Among the companies listed on the Sensex, Sun Pharma saw a notable decline of 4.43% after reporting a 20% year-on-year drop in consolidated net profit, amounting to Rs 2,279 crore for the first quarter ending June 30, 2025.
Other companies that faced losses included Tata Steel, Maruti, Tata Motors, Infosys, Bharti Airtel, and Tech Mahindra.
Conversely, stocks such as Trent, Asian Paints, Hindustan Unilever, ITC, Kotak Mahindra Bank, and Reliance Industries managed to record gains.
On Thursday, Trump signed an executive order imposing tariffs on over 60 countries, with negotiations for trade agreements intensifying as the August 1 deadline approaches.
The executive order, titled 'Further Modifying The Reciprocal Tariff Rates', outlined tariff rates for nearly 70 nations, including the 25% 'Reciprocal Tariff, Adjusted' on India. However, the order did not specify the 'penalty' Trump mentioned regarding India's purchases of Russian military equipment and energy.
While the August 1 deadline looms, the new tariffs are set to take effect from August 7.
Data from the exchange indicated that Foreign Institutional Investors (FIIs) sold equities worth Rs 5,588.91 crore on Thursday.
Asian markets also reflected this trend, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng all closing lower.
European equity markets were similarly in the red, and US markets ended Thursday on a negative note.
Additionally, the global oil benchmark, Brent crude, saw a decrease of 0.39%, trading at USD 71.42 per barrel.
On the previous day, the Sensex had already fallen by 296.28 points, or 0.36%, closing at 81,185.58, while the Nifty dropped by 86.70 points, or 0.35%, to 24,768.35.