Sensex falls 2,000 points in 3 days—What's triggering the decline?
What's the story
The Indian stock market is on a downward spiral, with the Sensex crashing nearly 700 points in today's trading session. The fall comes amid fears of a delayed India-US trade deal, continued foreign capital outflows, and disappointing Q1 results. The Sensex opened at 81,299.97, down from its previous close of 81,463, and slipped nearly 700 points—or 0.84%—to touch an intraday low of 80,776. The Nifty 50 mirrored the decline, falling 0.8% to hit an intraday low of 24,646.
Wealth erosion
Investors' wealth declines by ₹12L crore in 3 days
In the last three sessions, the Sensex has crashed nearly 1,950 points or 2.4%. Meanwhile, the Nifty 50 has fallen by a similar margin. This market downturn has led to an erosion of investor wealth by over ₹12 lakh crore in just three days. On Monday alone, nearly ₹4 lakh crore was wiped out, with the BSE's total market cap dropping from ₹451.7 lakh crore in the previous session.
Trade deal concerns
India-US trade deal deadlock worsens market sentiments
The India-US trade negotiations have hit a roadblock, with no official communication from either side and no signs of an imminent deal as the August 1 deadline nears. The US is demanding greater access for agriculture, dairy, and genetically modified (GM) products in India while New Delhi is adamant about protecting its farmers. This uncertainty has affected market sentiments significantly.
Market pressures
FPIs continue to sell Indian equities
Foreign portfolio investors (FPIs) have been aggressively selling Indian equities amid stretched valuations. They have sold off Indian stocks worth ₹30,509 crore in the cash segment so far this month. Weak Q1 results from Indian corporates are also a major dampener at this juncture, with experts warning that unimpressive earnings could lead to a significant correction in the days to come.
Growth concerns
Domestic market needs fresh positive triggers
The domestic market is struggling without fresh positive triggers. Despite the Indian economy's resilience amid global turmoil, the growth narrative alone can't offset weak corporate earnings and tariff-related uncertainties. The Asian Development Bank (ADB) has lowered India's GDP growth forecast to 6.5% for FY26 from its April estimate of 6.7%, citing concerns over potential US tariffs and uncertainty over related policy measures.