Sensex Tanks 500 Points After Trump’s 50 Tariff Shock on India (Representative image) (Image Source: iStockphoto)
New Delhi: The Indian stock market experienced a notable decline today as the BSE Sensex tumbled over 500 points. This drop can be attributed to escalating trade tensions between India and the United States, which have unsettled investors and triggered a wave of selling. The dip follows the US President Donald Trump’s tariff announcement, levying duties up to 50% on Indian goods.
Market Reaction to Trade Tensions
At 10:07 AM IST, the Sensex was down by 496.21 points, standing at 80,127.05, while the NSE Nifty50 recorded a loss of 151.60 points, settling at 24,444.55. The downturn followed an announcement by US President Donald Trump, who ruled out any trade discussions with India until outstanding issues are addressed. This announcement included a new 25% tariff on Indian exports, raising the total tariffs to 50%, effective from August 27, 2025.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,997.19 crore on Thursday, according to exchange data. Domestic Institutional Investors (DII), however, bought stocks worth Rs 10,864.04 crore in the previous trade.
Economic Factors Contributing to the Decline
Analysts highlight several macroeconomic challenges, including a weakening rupee, which recently hovered near Rs 87.78, and disappointing corporate earnings. “Yesterday’s sharp 250 point recovery from the low level in Nifty was caused by short covering triggered by the strong buying by DIIs of Rs 10,864 crore. In the present context of negative sentiments in the market caused by the tariff skirmishes between India and the US, FIIs are likely to continue selling in the cash market. The only saving grace is the sustained DII buying, which remains strong,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
As the trade standoff with the US continues, the outlook for the stock market remains uncertain. Analysts suggest that unless there is a resolution, volatility is likely to persist. The key support level for the Nifty stands at 24,344; maintaining this level could encourage buying on dips.