Donald Trump tariff impact on stock market today: Rs 5 lakh crore lost in just 15 minutes! Nifty50, BSE Sensex recover from lows – top reasons for fall
Nifty50 and BSE Sensex, the Indian equity benchmark indices, dropped in trade on Thursday after US President Trump announced a 25% tariff plus additional penalty on India. While Nifty50 went below 24,700, BSE Sensex was down 600 points intraday. At 11:01 AM, Nifty50 was trading at 24,725.40, down 130 points or 0.52%. BSE Sensex was at 81,034.50, down 447 points or 0.55%.US President Donald Trump announced 25% tariffs on Indian exports to America, effective August 1. The biggest risk seen by market experts is the ‘additional; penalty’ announced by Trump for India’s oil and arms purchases from Russia.Companies listed on BSE experienced a collective reduction in market value, with total market capitalisation decreasing by Rs 5.5 lakh crore to Rs 453.35 lakh crore.Across sectors, Nifty Auto declined by 1%, accompanied by negative performance in banking, metal, pharmaceutical, and real estate indices.
Why is the stock market falling today? Top reasons
1) US 25% tariffThe suggested 25% tariff would have a substantial effect on India in comparison to other trading allies.Industry experts indicate that if the tariffs take effect, they would significantly affect India’s primary exports to the US, particularly in textiles, pharmaceuticals and automotive parts sectors.The US administration indicated additional sanctions against India, referencing trade disparities and India’s association with the BRICS group, which it considers opposed to US interests.“The 25 % tariff on India plus an unspecified penalty for energy and defence-related purchases from Russia is very bad news for Indian exports and thereby on the growth prospects of the Indian economy in the short run. Since trade negotiations with India are continuing, perhaps, the 25 % tariff may come down eventually. But certainly, there is a short-term hit to Indian exports and GDP growth. This short-term hit will reflect in the stock market, too, in the short-term,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.2) Federal Reserve’s Latest PositionMarket confidence declined following the US Federal Reserve’s decision to maintain current interest rates at their fifth consecutive meeting. Despite this being anticipated, Federal Reserve Chairman Powell’s comments indicated hesitation regarding a September rate adjustment, noting it was premature to make such a determination.The Federal Reserve’s current position, whilst somewhat limiting, has not yet affected economic growth, extending the wait for policy adjustments.3) Rise in Crude Oil PricesOil prices stabilised on Thursday as traders assessed potential supply constraints amidst US President Donald Trump’s tariff announcements regarding the Ukraine situation. Nevertheless, an unexpected increase in US crude stockpiles limited price advances.Brent crude remained close to $73 per barrel, whilst WTI stayed under $70. The two key benchmarks had increased by 1% during the previous session, yet current geopolitical uncertainty and conflicting inventory reports maintained market caution.4) Continued FII selling adds pressureForeign institutional investors (FIIs) have consistently remained net sellers, withdrawing approximately Rs 25,000 crore from Indian equities across eight recent trading sessions.Market experts indicate US President Donald Trump’s suggested 25% tariff on Indian imports could negatively influence FII outlook. Nuvama reports that industries including pharmaceuticals, auto ancillaries, select industrials, cables and wires, and tiles—where the US sets the marginal price—might experience the greatest impact.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
