Sensex Drops 150 Points, Nifty 50 Closes Below 25,500; What Caused the Decline in Indian Market?

Indian stock markets ended lower on Wednesday due to global uncertainty, with the metal sector facing pressure from tariff concerns. The Nifty Metal index fell after President Trump announced high tariffs on copper imports, adding to the existing tariffs on steel and aluminum.

After the closing bell, Sensex dropped 176.43 points, or 0.21%, to end at 83,536.08, while the Nifty fell 46.40 points, or 0.18%, to close at 25,476.10 Bank Nifty also declined, closing at 57,213.55 down by 42.75 points or 0.07%.

Top Gainers And Losers:

HCL Technologies, Hindalco, Tata Steel, Apollo Hospitals, Tech Mahindra were the biggest losers on the Nifty index. While, Shriram Finance, Coal India, Hindustan Uniliver, Ultratech Cement and Powergrid were among top gainers.

Among sectors, Metal, Realty, and Oil & Gas indices all dropped by about 1.4% each. Media, IT, and PSU Bank sectors fell by around 0.5% each. FMCG, Auto, and Consumer Durables sectors saw slight gains, rising by 0.3% to 0.5%.

The BSE Midcap Index saw a small decline, while the Smallcap Index gained 0.5%. The Nifty Midcap 150 index also dropped for the 4th consecutive day.

In positive news, Nifty Smallcap 250 and Pharma indices broke their 2-day losing streak, while Nifty Auto ended its 3-day decline.

The market breadth was neutral, with an advance-decline ratio of 1:1, indicating an equal number of stocks advancing and declining.

Why the Indian Stock Market Fell Today?

Indian Stock Market fell today mainly due to concerns over rising trade tensions between India and the U.S. Investors reacted negatively after U.S. President Donald Trump confirmed that there would be no more extensions and that new tariffs would take effect from August 1. This especially impacted the metal sector, which dropped by 0.6% after the U.S. announced a new tariff on all copper imports.

Additionally, investors were cautious ahead of the U.S. Federal Reserve's meeting minutes, which are expected to give clues about the future path of interest rates. This uncertainty added to the market's weak sentiment.

Market Outlook:

"Market sentiment remained cautious as participants closely tracked developments in the India-US tariff negotiations. This came after US President Donald Trump announced that no further extensions would be granted, with tariffs slated to take effect from August 1. The metal sector bore the brunt of this announcement, particularly after the US revealed plans to impose new tariffs . Trump's call for a 50% tariff, further weighing on market mood," said Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity.

"The index formed a small bear candle with small shadows in either direction which remained enclosed inside previous session price action signaling continuation of the consolidation for the fourth consecutive session. Going forward, we expect the Nifty to gradually move towards the immediate resistance placed at 25,600. A decisive breakout above this level could open further upside towards the 25,800 marks. We maintain a buy-on-dips strategy as long as the index holds above this critical support area," said Bajaj Broking.

Rupee VS Dollar:

The rupee ended 2 paise stronger against the US dollar, closing at 85.68. It had closed at 85.70 per dollar on Tuesday.

"The Indian Rupee reversed its initial losses to gain throughout the day, performing better than most other Asian currencies. This strength was primarily attributed to dollar supply from local banks and renewed optimism surrounding a potential US-India trade deal.

Meanwhile, the dollar index experienced fluctuation in the narrow range as US President Donald Trump reiterated his commitment to aggressive tariff plans, emphasizing that he would not grant further extensions on country-specific levies slated for early August," said Dilip Parmar, Senior Research Analyst at HDFC Securities.

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