Indian equity markets witnessed a sharp sell-off today, with the Sensex plunging over 800 points and the Nifty slipping below 24,400, as investor sentiment soured following aggressive tariff measures announced by U.S. President Donald Trump. The decline was broad-based, led by metal, auto, and IT stocks, which bore the brunt of the selling pressure.
What Triggered the Fall?
1. Trump’s 50% Tariff on Indian Exports
- In a retaliatory move against India’s continued oil trade with Russia, Trump signed an executive order imposing an additional 25% tariff on Indian goods, raising the total levy to 50%.
- Sectors like pharma, textiles, seafood, and gems & jewellery, which have significant exposure to the U.S. market, saw heavy selling.
2. FII Outflows Continue
- Foreign Institutional Investors (FIIs) have been net sellers throughout August, offloading ₹15,950 crore in the cash market so far.
- The tariff announcement has intensified risk aversion, prompting further FII exits.
3. Sectoral Impact
- Metal Index: Down 1.71%
- Auto & IT: Sharp declines due to global exposure and margin concerns
- Realty, Consumer Durables, Midcaps: All in the red
- Oil & Gas: The only gainer, up 0.06%
- India VIX: Rose 2.05% to 11.93, indicating rising volatility
Market Snapshot (3:00 PM IST)
| Index | Movement | Current Level |
|---|---|---|
| Sensex | -672.97 pts (-0.83%) | 79,950.29 |
| Nifty | -210.40 pts (-0.86%) | 24,385.75 |
| Nifty Bank | -0.78% | — |
| India VIX | +2.05% | 11.93 |
Stock Highlights
- Coforge: Down 6% to ₹1,605, hit by weak results from key client Sabre Corp, which fell 35% on Nasdaq.
- BHEL: Dropped nearly 7% after reporting a widened net loss of ₹455.5 crore in Q1 FY26.
What Should Traders & Investors Do?
- Short-Term Traders: Stay cautious; volatility is high. Avoid overexposure to export-driven sectors.
- Long-Term Investors: Use dips to accumulate quality domestic-oriented stocks.
- Watchlist Sectors: FMCG, PSU Banks, and Energy may offer relative stability.
Final Thoughts
The market’s reaction today underscores the sensitivity to geopolitical developments and trade policy shifts. While domestic inflows from DIIs are helping cushion the fall, sustained FII selling and global uncertainty could keep volatility elevated in the near term.
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