Indian equity markets remained under intense selling pressure for the fifth straight trading day on Friday, dragged down by persistent worries over potential hikes in US tariffs on Indian exports. The benchmark indices extended their recent decline, eroding a significant chunk of market capitalisation.
Markets in a Prolonged Slide
The trading session on Friday saw the 30-share BSE Sensex open on a flat note but quickly turn negative. The index slid consistently throughout the day, failing to find any solid footing. It finally settled at 83,576 points, marking a sharp single-day fall of 605 points or 0.7%. This closing level is notable as it represents the first time the Sensex has ended a session below the 84,000-point mark in nearly a month.
Mirroring the weakness in the broader market, the NSE Nifty 50 also ended deep in the red. The index closed the day's trade at 25,683 points, down by 194 points or 0.8%. The sustained downturn over the past week has been severe. Over the last five consecutive sessions, the Sensex has plummeted by nearly 2,200 points, translating to a loss of 2.5%.
Wealth Erosion and the Culprits Behind the Fall
The cumulative effect of this bearish phase has been a massive destruction of investor wealth. Data from the Bombay Stock Exchange (BSE) reveals that the total market capitalisation of all listed companies in India has shrunk by a staggering Rs 13.5 lakh crore during this five-day period. The country's total market cap now stands at Rs 468.5 lakh crore.
Market experts point to a combination of factors driving the pessimism. Ajit Mishra, Senior Vice President of Research at Religare Broking, highlighted that investor sentiment was notably subdued due to renewed uncertainty. The primary concern revolves around potential tariff actions by the United States and related developments in the US Supreme Court, which could impact Indian exports.
Sustained Foreign Investor Exodus
Adding fuel to the fire, foreign institutional investors (FIIs) continued their selling spree in the Indian markets. Their activity on Friday resulted in a substantial net outflow of Rs 3,769 crore. This persistent selling by foreign funds has been a major overhang on market sentiment, exacerbating the downward pressure on stock prices. Domestic market players confirmed that this relentless offloading by overseas investors significantly affected the overall trading mood on Dalal Street.
The confluence of external trade tensions and relentless foreign fund selling has created a challenging environment for Indian equities. Investors are now keenly watching for clarity on the US tariff front and any signs of a reversal in the FII flow trend to gauge the market's next direction.
