Sensex Plunges 600 Points, Investors Lose ₹5 Lakh Crore Amid Trump’s Tariff Action

Quick Summary

• Sharp Decline in Indian Stock Markets: The BSE Sensex fell 604 points (0.74%) to 81,668, and the Nifty50 dropped 183 points (0.73%) to 24,668 as markets reacted sharply to new global developments.
• Impact on Market Capitalization: Total market capitalization of BSE-listed companies dropped by Rs 5.5 lakh crore.
• Sectoral Losses: Sectors including banking, metals, pharma, realty, and auto saw declines; Nifty Auto slipped by 1%.

Key Drivers of Market Decline:

1. US Tariffs on India:

– U.S. President Donald Trump proposed a 25% tariff on Indian goods starting August 1, alongside an unspecified penalty for energy and defense-related trade with Russia.
– Targeted sectors include textiles, pharmaceuticals & auto components-major contributors to India’s exports.
– Trump cited India’s alignment with BRICS as “unfriendly” toward U.S interests.

1. U.S Federal Reserve Stance:

– Fed maintained interest rates for the fifth consecutive meeting; uncertainty over future rate cuts dampened market optimism.

1. Rising Crude oil Prices:

– Brent crude steadied around $73 per barrel amid geopolitical tensions influencing prices.

1. Foreign Institutional Investor (FII) Sell-offs:

– FIIs sold Rs 25,000 crore worth of Indian equities in the past eight trading sessions-accelerated by tariff threat concerns.

Expert Insight: Dr. VK Vijayakumar from Geojit Investments remarked that tariffs would negatively affect India’s GDP growth prospects and exports in the short term.

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Indian Opinion Analysis

The proposed U.S tariffs are likely to strain Indo-U.S economic relations and impact key export-driven industries such as textiles and pharmaceuticals in India-posing short-term challenges for growth trajectory amidst global uncertainties like rising oil prices and monetary policy shifts from the federal Reserve.

While FIIs continue pulling out funds due to negative sentiment caused by geopolitical headwinds surrounding these tariffs and penalties linked with India’s defense sourcing decisions from Russia-the broader implications signal risks at diplomatic fronts too national exporters_requiring prioritizing alternate diversifications!