Sensex and Nifty News: Markets Crash as Investors Lose ₹5 Lakh Crore

The Indian stock market experienced a steep decline on Friday, August 1, as both benchmark indices — Sensex and Nifty — closed notably lower. The selloff was triggered by multiple global and domestic concerns, leading to a massive erosion in investor wealth.

Market Performance

• Sensex fell 586 points or 0.72% to close at 80,599.91
• Nifty 50 slipped 203 points or 0.82% to settle at 24,565.35
• BSE Midcap Index: Down 1.37%
• BSE Small-cap Index: Down 1.59%
• Total investor wealth lost: Over ₹5 lakh crore
• Market capitalization of BSE-listed firms dropped to ₹444.5 lakh crore from ₹449.7 lakh crore

Main News: Key Reasons Behind the Market Crash

1. US Tariffs on Indian Exports

• US President Donald Trump imposed a 25% reciprocal tariff on Indian goods.
• The new executive order affects over 70 countries, including India.
• Investor sentiment weakened due to uncertainty over possible additional penalties related to India’s Russian oil imports.

2. Foreign Institutional Investor (FII) Selling

• FIIs sold ₹5,588.91 crore worth of equities on Thursday alone.
• In July, FPIs offloaded ₹47,667 crore in the cash segment.
• Continuous outflows are putting pressure on equity valuations and market confidence.

3. Stronger US Dollar

• The dollar index rose to 100.26, its highest level since May 29.
• A stronger dollar often triggers capital outflows from emerging markets like India.
• It also raises input costs for Indian companies dependent on imports.

4. Valuation vs Earnings Mismatch

• While Q1 earnings were largely on track, they failed to support high market valuations.
• The market has remained range-bound since June, with no breakout due to lukewarm results.

5. Global Market Weakness

• Major Asian indices in Japan, South Korea, China, and Hong Kong traded in the red.
• Weak cues from Wall Street and US futures added to investor anxiety.

Company Details: Sectoral and Stock-Wise Impact

• Top laggards: Tata Steel, Maruti, Tata Motors, Infosys, Bharti Airtel, Tech Mahindra
• IT, Metals, and Telecom stocks saw the steepest declines
• Pharma sector faced additional pressure:
  • Nifty Pharma Index fell 3%
  • Sun Pharma dropped 4%
  • Other losers: Aurobindo Pharma, Gland Pharma, Cipla, Granules India, Lupin
• Pressure on pharma came after letters from Trump's administration to 17 global drug makers, urging a price cut and implementation of Most Favored Nation pricing

Volatility Spikes

• India VIX rose by 2%, reaching 11.77
• A rising VIX indicates higher market uncertainty and increased risk aversion among traders

Summary of the Article

The Indian stock market faced a severe correction on August 1, with the Sensex falling nearly 600 points and the Nifty slipping below the 24,600 mark. A combination of global and domestic triggers — including US tariffs on Indian goods, foreign investor selling, and weak earnings data — contributed to the slide.

Investor wealth saw a steep erosion of ₹5 lakh crore, while the broader indices in the mid and small-cap segments also suffered. Increased market volatility, coupled with uncertainties around international trade relations and global inflation, further dented sentiment.