Indian stocks see ₹5-trillion wipeout

Amid US President Donald Trump’s 50% tariff assault, most Indians ignored the severe slide in the stock market since 7 April, repeated with Operation Sindoor on 7 May, and peaking on 8 August for unimpressive earnings, stretched valuations and large foreign capital (FPI) outflows in between April and early August.

- Shivaji Sarkar

The Sensex has been in a bear hug for the last six consecutive weeks. The market is shaken by Trump’s statement on putting off talks until the tariff dispute is resolved. On 8 August, Sensex crashed 847 points, or 1.05%, to hit an intraday low of 79,775.84. The Nifty also dropped by 1.05% to hit the day’s low of 24,337.50. Broader markets underperformed. The BSE Midcap index lost 1.56%, while the Smallcap index lost 1.03%. The overall market capitalisation of BSE-listed firms dropped to ₹440 lakh crore from ₹445 lakh crore in the previous session. Thus, the massive across-segments selloff made investors poorer by about ₹5 lakh crore in a single session, as per market estimates.

Foreign investors had put in ₹14,590 crore in the country’s equity market in June, marking the third straight month of investment, supported by improving global liquidity conditions, easing geopolitical tensions, and a rate cut by the RBI. However, FPIs turned net sellers in July and pulled out ₹1,421 crore, in the first week of July itself, data with the depositories showed. FPIs made a total outflow of ₹17,741 crore in the whole of July, marking a shift after three consecutive months of inflows, according to data released by NSDL.