Indian markets tumble as Sensex slips nearly 600 points and Nifty drops below 24,550

The Indian stock market faces sharp declines today as global tensions and domestic challenges weigh heavily on investor sentiment. Both benchmark indices, the Sensex and Nifty 50, open lower and extend losses during early trading hours. The Sensex drops by almost 600 points, slipping close to the 80,250 mark, while the Nifty 50 falls below 24,550. This marks the second consecutive day of significant losses, following Tuesday’s steep fall when the Sensex had plunged more than 800 points and the Nifty had lost over 250 points.

The mood across Dalal Street remains nervous as investors try to digest the impact of international developments, foreign capital outflows, and weak global cues. Market activity reflects widespread selling pressure, suggesting that traders and long-term investors alike are adopting a cautious stance.

Impact of US Tariffs

The main trigger behind the latest decline is the fresh round of punitive tariffs announced by the United States. These new duties effectively double the tariffs on certain Indian exports, taking them to 50 percent. The move comes as a reaction to India’s continued oil purchases from Russia, which has been a sensitive geopolitical issue. The sudden imposition of tariffs has sent shockwaves through export-oriented sectors, particularly textiles, chemicals, auto components, seafood, and gems and jewelry.

For these industries, higher tariffs mean reduced competitiveness in overseas markets. Exporters fear that demand from the United States, one of India’s largest trading partners, will weaken considerably. Investors in these sectors quickly pull back, causing steep price declines across many related stocks. The ripple effect spreads to the broader market as well, adding to the overall bearish tone.

Foreign Investor Outflows

Another pressing concern is the sharp withdrawal of foreign institutional investors. August records one of the highest monthly outflows in recent years, with nearly 2.7 billion dollars exiting Indian equities. This is the largest withdrawal since February and reflects growing caution among overseas investors.

Foreign investors often act as major drivers of the Indian market. When they withdraw capital in large volumes, domestic indices usually come under heavy selling pressure. The combination of tariff worries and broader global uncertainty prompts them to book profits and move funds to safer assets. As a result, Indian stocks face strong headwinds and limited buying support, deepening the ongoing correction.

Global Market Influence

The weakness in Indian equities also mirrors trends across other Asian markets. Shares in China, Japan, and South Korea open lower today, responding to worries about the slowdown in global trade and concerns over rising interest rates in developed economies. These regional declines add external pressure on Indian benchmarks.

Investors around the world remain cautious as trade disputes escalate and monetary policies stay tight. The combination of high interest rates, slowing demand, and now fresh tariffs creates an environment of uncertainty. Since India is closely linked to global trade and financial flows, its markets cannot remain insulated from these broader shocks.

Sector-Wise Performance

Losses spread across nearly every sector of the Indian market. Banks trade lower as concerns about foreign outflows and potential stress on credit growth rise. Export-oriented companies, already hit directly by tariffs, suffer some of the steepest declines. The IT sector, which earns a large part of its revenue from the U.S., also comes under pressure as the demand outlook weakens.

Real estate and power sector stocks lose ground as investors pull out of mid-cap and small-cap counters. Overall, the weakness is broad-based, leaving very few gainers in the market. The sense of risk aversion is strong, and investors prefer to stay away from fresh buying in volatile conditions.

The IPO Picture

The market for new share listings is also going through a challenging phase. Many small and medium enterprises (SME) IPOs listed on the NSE earlier this year now trade well below their issue prices. Out of 121 SME companies that went public in 2025, 30 are trading at losses of up to 58 percent. In contrast, only nine companies in the mainboard IPO space are currently below their listing price.

This sharp contrast shows how investors are turning more cautious toward smaller companies with less liquidity. The poor performance of SME stocks is eroding investor confidence in this segment. While mainboard IPOs still manage to hold investor interest, the SME space is witnessing a clear meltdown, highlighting the risks of speculative investments in uncertain times.

Expiry-Driven Volatility

Adding to the pressure is the monthly derivatives expiry. The expiry of futures and options contracts often brings additional volatility to the market, and this month is no exception. Traders square off their positions in large numbers, amplifying price swings. Combined with the global tariff issue, the expiry factor is creating a perfect storm for heightened uncertainty.

The futures market indicates weakness right from the start of the day. The GIFT Nifty trades at a discount to its previous close, hinting at a weak domestic opening. This signal turns out to be accurate, as indices indeed slide sharply after the market bell rings.

Stock Recommendations Amid Turmoil

Even in such a weak environment, market experts point out selective opportunities. Some analysts recommend low-priced stocks under 100 rupees that are relatively insulated from tariff shocks. Companies in retail and consumer segments such as fashion, food services, and restaurants remain on watch lists for intraday trades. However, these suggestions are short-term in nature and come with high risk.

Overall, the advice from experts leans toward caution. Many suggest avoiding aggressive buying until clarity emerges on global trade policies and foreign investor flows. Instead, they recommend focusing on defensive sectors like FMCG and pharmaceuticals, which tend to perform better during uncertain times.

The Bigger Picture

The declines over the past two sessions underline the fragility of the current rally. Indian markets had recently touched record highs earlier this month, with optimism around strong domestic growth and robust earnings. However, the sudden change in global dynamics has wiped out a significant part of those gains in a matter of days.

This episode shows how quickly market sentiment can shift when external shocks emerge. For a country like India, which is deeply integrated into global trade and investment networks, international policies and geopolitical events have a direct impact on domestic financial stability. The U.S. tariffs highlight this dependence dramatically.

Outlook for Coming Days

The short-term outlook remains clouded with uncertainty. Much will depend on whether the tariff issue escalates further or if there are signs of a diplomatic resolution. Continued foreign investor selling could extend the correction, while any easing of tensions may provide some relief.

Investors are expected to track global developments closely while also watching domestic macroeconomic indicators. India’s economic fundamentals remain relatively strong, but global headwinds could overshadow these positives in the near term. Volatility is likely to remain high, and market participants may choose to tread carefully until the situation stabilizes.

Final Thoughts

The Indian stock market today reflects the heavy burden of global trade tensions, foreign capital outflows, and expiry-driven volatility. The Sensex and Nifty both record steep losses, dragging almost all major sectors into negative territory. Export-oriented companies and SME IPOs emerge as the worst affected, while foreign investors continue to withdraw funds at a record pace.

The atmosphere in the market is tense, with traders and long-term investors alike preferring caution over fresh commitments. The coming sessions are expected to remain volatile as global uncertainties persist. For now, the Indian stock market stands at a crossroads, balancing between strong domestic fundamentals and the pressures of an increasingly unpredictable global environment.