Equity benchmark indices Sensex and Nifty plunged to a three-month low on Friday due to unabated foreign fund outflows and investor anxiety over the move by US President Donald Trump to raise tariffs imposed on Indian goods by two times. According to a news agency report, the Sensex fell by 765.47 points or 0.95 per cent to end the day at 79,857.79, and NSE Nifty declined by 232.85 points, or 0.95 per cent, at 24,363.30.
Nifty and Sensex lost 0.8 per cent and 0.9 per cent, respectively, on a weekly basis, the longest losing streak since April 2020. It was a follow-up to a sharp loss of investor wealth in a very wide sell-off observed at the stock market on Thursday at the Bombay Stock Exchange. All of the BSE-listed companies lost market cap of 5 lakh crore in a single session; this was 445 lakh crore to 440 lakh crore.
The new episode of selling pressure was generated when President Trump, speaking on the undeclined purchase of Russian oil by India, imposed a 25 percent tariff on Indian imports. This was on top of the previous 25 per cent duty that had been imposed on July 30, making the total tariff rate 50 per cent. The new responsibilities, which are formalised in an executive order called Addressing Threats to the US by the Government of the Russian Federation, will come into force on August 7.
In the Sensex pack, Bharti Airtel, Tata Motors, Mahindra and Mahindra group, Kotak Mahindra Bank, Axis Bank, and Reliance Industries were the biggest laggards dragging the index. However, on the other hand, NTPC, Titan, Trent, ITC, and Bajaj Finserv have gained some support in the wider market and have finished in positive territory.
Analysts warn that as long as the state of progress on the trade talks remains unknown, the Indian markets can remain highly volatile with the inflows of foreign funds in check.
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