The Indian stock market has taken a significant hit, with the benchmark Sensex and Nifty 50 indices experiencing a sharp decline, pushing them to their lowest levels in three months. The downturn is primarily attributed to a massive sell-off driven by concerns over U.S. tariff policies and a significant outflow of foreign capital.
On Friday, the Sensex, Nifty 50, and Bank Nifty all fell by nearly 1%. The Sensex closed at 79,857.79, down by 765.47 points, while the Nifty 50 dropped 232.85 points to 24,363.30. The Bank Nifty also fell by 516.25 points, ending the day at 55,004.90. According to the Economic Times, this marked the sixth consecutive week of losses for the indices.
The total market capitalization of companies listed on the BSE plummeted by nearly ₹5 lakh crore in a single session, from ₹445 lakh crore to ₹440 lakh crore, due to widespread selling across all sectors.
Major stocks like HDFC and Bharti Airtel were hit hard, contributing to the broader market decline. The downturn affected most sectoral indices, with the Nifty Smallcap and Midcap indices falling by 1.4% and 1.1%, respectively. While the banking and metal sectors managed to hold some gains over the week, sectors like IT, finance, energy, oil & gas, FMCG, and pharmaceuticals saw significant losses.
Individual stocks also saw sharp drops. Adani Enterprises’ share price fell by about 7%. Textile companies such as KPR Mill, Gokaldas Exports, Vardhman Textiles, and Trident also saw their stock prices decrease significantly. In contrast, Hero MotoCorp and LIC’s stock prices showed some gains.
According to The Mint, the Indian market was already reeling from the impact of Donald Trump’s tariff policies. Pre-existing concerns over corporate earnings, overvaluations, and massive foreign capital outflows were compounded by Trump’s recent aggressive tariff stance. Experts believe that a 50% tariff could reduce India’s GDP by up to 1%.
Vinod Nair, Head of Research at Geojit Investments, stated that the Indian stock market has fallen to its lowest level in three months due to concerns over the potential impact of U.S. tariffs on Indian exports. The continuous selling by foreign institutional investors (FIIs) has also added pressure on domestic indices.
Nair added that global financial institutions have begun lowering their growth forecasts for India for both 2025 and 2026, considering the ongoing tariff-related uncertainties. This, he said, is only adding to the uncertainty surrounding India’s trade and macroeconomics.
Foreign investment in the Indian stock market has also suffered. After a massive outflow in January, foreign investment had shown signs of recovery from March to June. However, this trend reversed in July, with more foreign capital exiting the market. The situation has continued into August, largely due to the imposition of Trump’s tariffs.
