The Indian stock market saw sharp losses in early trade on Thursday after a new round of US tariffs raised duties on Indian exports to 50%.
- BSE Sensex: Fell over 500 points (0.60%) to an intraday low of 80,278.38
- Nifty 50: Dropped 0.60% to 24,556.50
- BSE Midcap & Smallcap indices: Both fell by over 0.5%
- Market Capitalisation: Declined from ₹449 lakh crore to ₹447 lakh crore, erasing about ₹2 lakh crore in investor wealth
Key Factors Behind the Market Sell-Off
- US Tariff Impact:
- In late July, US President Donald Trump announced a 25% tariff on Indian goods effective August 1.
- In early August, an additional 25% tariff was imposed from August 27 due to India’s imports of Russian crude oil.
- Expectations of a pre-deadline deal with the US did not materialize, worsening market sentiment.
- Foreign Capital Outflows: Persistent outflows have pressured the market.
- Weak Corporate Earnings: Lower-than-expected results from major companies are weighing on investor confidence.
- Stretched Valuations: Many stocks are trading at high multiples, amplifying downside risk.
- Global Factors: Trade tensions, geopolitical uncertainty, and global inflation concerns continue to impact sentiment.
US Treasury Secretary Scott Bessent noted that both countries are expected to seek a solution to the tariff issue, which may influence market direction in the coming days.
