Mumbai, July 31, 2025: In a brutal jolt to Indian equity markets, investors witnessed a staggering erosion of over ₹5.5 lakh crore in market capitalisation within just 15 minutes of Thursday’s opening bell. The sharp sell-off came in direct response to the United States imposing 25% tariffs on all Indian goods, triggering a widespread selloff across sectors.
The BSE Sensex nosedived by 786.36 points to settle at 80,695.50 in early trade, while the Nifty 50 plummeted 212.8 points to 24,642.25, sending alarm bells ringing through Dalal Street.
Bloodbath Across the Board: Every Sector in Red
From blue-chip giants to midcaps, no segment was spared in the opening collapse. According to The Economic Times, the total market capitalisation of BSE-listed companies dropped from ₹458.8 lakh crore to ₹453.3 lakh crore, wiping out investor wealth worth ₹5.5 lakh crore.
The oil & gas sector bore the brunt, reacting sharply to the dual pressure of US penalties on India’s Russian crude imports and general market sentiment. Major oil stocks including Indian Oil Corporation, BPCL, Mahanagar Gas, ONGC, and Gujarat Gas were all deep in the red during early trading.
Top Sensex Losers: Auto and Heavyweights Hit Hard
Among the biggest losers on the Sensex were:
- Reliance Industries – battered by its exposure to both oil and global markets.
- Tata Motors – impacted due to export exposure amid new US tariffs.
- Mahindra & Mahindra, Bharti Airtel, Titan, and State Bank of India also saw heavy selling.
These stocks dragged benchmark indices down, contributing significantly to the morning crash.
Interestingly, a few stocks held their ground:
- Hindustan Unilever,
- Eternal, and
- Powergrid managed to stay afloat in an otherwise turbulent session.
Foreign Investors Pulling Out
Adding to the gloom, Foreign Institutional Investors (FIIs) continued to exit Indian equities. As per exchange data, FIIs offloaded stocks worth ₹850.04 crore on Wednesday alone — a trend likely to intensify amid rising uncertainty and geopolitical tension between India and the United States.
Currency Market: A Sliver of Relief
Even as equities bled, the Indian rupee staged a mild recovery after touching an all-time low earlier in the week. On Thursday morning, the rupee bounced back 14 paise to reach ₹87.66 per US dollar, after initially dipping to an intraday low of ₹87.74.
Traders attributed the rupee’s rebound to likely RBI intervention and modest gains in select Asian currencies, though the broader outlook remains under pressure.
Global Markets Mixed: Asia Reacts Cautiously
Asian peers too reflected the ripple effect of the US tariff announcement:
- South Korea’s Kospi, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng were all trading lower.
- However, Japan’s Nikkei 225 bucked the trend and opened in positive territory, perhaps aided by better-than-expected earnings from tech giants.
Investor Sentiment: Panic or Opportunity?
Investor sentiment remains cautious to bearish. Market analysts caution that the reaction, though sharp, may not be over yet.
“This is a knee-jerk reaction to an unexpected global development. If diplomatic talks don’t resume swiftly, we may see a prolonged correction in export-heavy and energy sectors,” said Priya Shah, Senior Equity Strategist at Mumbai-based Nova Finance.
Some also believe this could be an opportunity for long-term investors to buy quality stocks at a discount, especially in non-export-driven sectors like domestic consumption and healthcare.
Looking Ahead: What Should Investors Do?
Experts recommend a wait-and-watch approach, particularly for retail investors. With volatility expected to remain high, staying diversified and avoiding panic selling is the general advice from wealth managers.
The Indian government is expected to respond diplomatically to the US tariffs, and all eyes are now on how the August 25 trade delegation visit unfolds—if it happens at all.
A Wake-Up Call for Indian Markets
Thursday’s dramatic opening was a stark reminder of India’s deep integration with the global economy—and how geopolitical moves can instantly impact domestic wealth and confidence.
As tensions between Washington and New Delhi escalate over trade and oil diplomacy, the next few days will be critical in determining whether this market rout was just a passing storm or the beginning of a broader correction in the Indian markets.
