Benchmark indices slumped over 1% on Tuesday, recording their biggest single-day fall in three months, as investor sentiment weakened ahead of the additional 25% US tariffs on goods imported from India, set to take effect from tomorrow. The continuous depreciation of the rupee against the dollar also weighed on markets.
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“Disappointment over the 50% tariff imposition has dampened the market, which was expecting a last-minute deal on lower tariff rates. Concerns about fiscal slippages following the GST rate cut and fears of delayed economic revival after Q1 earnings have weighed heavily on the market and investor sentiment,” said Manish Gunwani, Head of Equities at Bandhan Mutual Fund.
He added that the market is also facing pressure due to an increase in supply resulting from promoters and private equity firms selling off their stakes.
“Today’s sell-off is also due to MSCI rebalance. Strong macro situation is favourable for India. Going forward all depends on how the CAD pans out in the wake of tariff implementation,” said Gopal Agrawal, Senior Fund Manager, HDFC Mutual Fund.
Foreign portfolio investors sold shares worth Rs 6,516.49 crore while the domestic institutional investors bought shares worth Rs 7,060.37 crore, as per provisional data by the BSE.
Broader Market Losses and Sectoral Impact
The broader markets also fell sharply, with the BSE Midcap down 1.34% and the BSE Smallcap plunging 1.68% — the steepest single-day fall in a month. Barring FMCG, all sectoral indices closed in the red. Realty, metal, telecom, energy, and healthcare led the losses, declining up to 2.24%. The FMCG index was the lone gainer, rising 0.59% on expectations of increased consumption.
Market breadth remained negative, with 2,895 losers against 1,216 gainers on the BSE. Investors’ wealth eroded by ₹5.57 lakh crore, taking total market capitalisation down to ₹449.45 lakh crore.
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In the Sensex pack, barring five stocks, all ended in the red. Sun Pharma, Tata Steel, Bajaj Finance, Trent, and M&M were the top losers, falling up to 3.40%. On the other hand, HUL, Maruti Suzuki,
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