Last Updated:
Indian benchmark indices were trading near the day’s low on Tuesday, weighed down by weak global sentiment ahead of fresh US tariffs
Stock Market Crash Today
Why Is Stock Market Down Today? Indian stocks ended lower amid reports that the US President notified additional 25 per cent tariffs on India, thus placing the total tariff on India at 50 per cent, with-effect-from August 27.
At close, the BSE Sensex was down 849.37 points, or 1.04 per cent, at 80,786.54; while the NSE Nifty 50 declined 255.7 points, or 1.02 per cent, to 24,712.05.
Shares of Sun Pharma, HDFC Bank, Tata Steel, Bharat Electronics, and ICICI Bank were among the major drags on the Sensex on Tuesday, slipping between 1% and 2%. Sectorally, financials bore the brunt with the Nifty Bank falling 0.9% and the Nifty PSU Bank index shedding 0.6%, weighed down by losses in HDFC Bank and ICICI Bank, both down 1.2%. IT stocks, which derive a large share of revenue from the US, also edged lower by 0.2%.
Key Reasons Behind Today’s Market Decline
1. U.S. Tariffs on Indian Exports
Indian markets turned weak after U.S. President Donald Trump announced an additional 25% tariff on Indian exports linked to Russian oil purchases, effectively doubling levies to 50%. A Homeland Security notice confirmed implementation from 12:01 a.m. EDT Wednesday (9:31 p.m. IST Tuesday).
The move dashed investor hopes for a delay or compromise, especially after U.S. trade negotiators abruptly cancelled a planned late-August visit to New Delhi. With Indian exporters now facing duties far steeper than rivals like Vietnam and Bangladesh, sentiment soured sharply in early trade.
2. Profit Booking After Last Week’s Rally
Investors locked in gains following last week’s rally on GST reform optimism. Prime Minister Narendra Modi had earlier hinted at festive season tax cuts, including lowering GST on small cars to 18% and reducing premiums on health and life insurance.
Financial stocks bore the brunt of profit-taking. The Nifty Bank fell 1.1% and the PSU Bank index dropped 0.9%, dragged by HDFC Bank and ICICI Bank. IT shares also slipped 0.2% on U.S. revenue exposure, while midcaps and smallcaps declined 1.1% and 1.4%, respectively.
3. Persistent FII Outflows
Foreign Institutional Investors (FIIs) sold Rs 2,466 crore worth of equities on August 25, extending a broader exodus. For August so far, FIIs have sold Rs 20,976 crore, pushing year-to-date net outflows near Rs 1.2 trillion.
Though Domestic Institutional Investors (DIIs) purchased Rs 3,176.69 crore on the day, analysts caution rebounds may remain fragile. “Persistent FII outflows continue to weigh on sentiment,” said Jateen Trivedi of LKP Securities.
4. Rupee Weakness Adds Pressure
The rupee fell for a fifth straight session, sliding 22 paise to 87.78 per dollar in early trade. Traders braced for the impact of the new U.S. tariffs, with a weaker currency raising import costs and squeezing corporate margins.
5. Global Cues Turn Negative
Global markets added to the drag. Asian equities tracked Wall Street lower, with MSCI’s Asia-Pacific index down 0.6% and Japan’s Nikkei falling 1.1%. Futures pointed to weak European and U.S. opens.
Adding to jitters, Trump warned of “subsequent additional” tariffs on countries imposing digital taxes, keeping investors on edge.
6. Crude Oil Near Two-Week High
Brent crude hovered at $68.48 a barrel, while WTI traded at $64.47—just below recent two-week highs. Rising energy prices are fuelling margin concerns across Indian industries. The oil & gas index dropped nearly 1%, reflecting the pressure.
Technical Outlook
On the technical front, Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty’s inability to close above the 25,000 mark has capped buying momentum.
“Inability to close above 25,000/25,033 region yesterday suggests that buyers are not keen on chasing prices higher. This leaves room for dips. Upswing possibility could diminish if Nifty slips below 24,870, but it would require a direct fall below 24,740 to initiate downside plays,” he said.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
Read More