Indian Stock Market Witnesses Worst Weekly Decline in Five Months, Sensex and Nifty End Below 80,000 and 24,500 Mark Respectively, Total Market Capitalisation Falls by ₹10 Lakh Crore, Market Experts Cautiously Optimistic Amid US Tariffs Concerns

Indices in India ended lower for the third consecutive session, with the Sensex slipping 270.92 points, or 0.34%, and the Nifty declining 74.05 points, or 0.30%. On a weekly basis, both indices posted their worst fall in five months, with losses of up to 1.84%. The total market capitalisation on the BSE fell by ₹1.52 lakh crore on Friday and by ₹10 lakh crore during the holiday-shortened week, settling at ₹443.65 lakh crore. Investor sentiment remained cautious due to US tariffs, and markets attempted to digest the full impact of the issue.

The Indian stock market experienced its third consecutive session of losses on Friday, July 2, 2025, as concerns over U.S. tariffs continued to weigh on investor sentiment. The BSE Sensex dropped 270.92 points, or 0.34%, to 79,806, while the NSE Nifty declined 74.05 points, or 0.30%, to 24,426. This marked the worst weekly fall for both indices in the last five months, with losses reaching up to 1.84% [3].

The total market capitalization on the BSE fell by ₹1.52 lakh crore on Friday and by ₹10 lakh crore during the holiday-shortened week, settling at ₹443.65 lakh crore. Investors remained cautious due to the ongoing U.S. tariff issue, which has led to a significant downturn in the market. The financial sector, particularly banks, has been the most affected, with HDFC Bank and ICICI Bank leading the losses [1].

The U.S. Department of Homeland Security issued a draft notice on Monday detailing the procedures for implementing new levies, which are set to take effect on Wednesday. The steep 50% tariffs, combined with the existing 25% tariff, have put Indian goods at a significant disadvantage against regional competitors such as Vietnam and Bangladesh [1]. The planned visit by U.S. trade negotiators to New Delhi, scheduled from August 25-29, has been called off, further dampening hopes for a resolution or postponement of the tariffs [1].

Market sentiment was weakened by the announcement, and despite strong domestic institutional buying, the market struggled to maintain its resilience. The resilience of the market, despite tepid earnings growth, has been attributed to sustained liquidity flows, which have prevented a significant correction [2]. Investors are now in a 'wait-and-watch' mode, focusing on the August 27 tariff deadline and the expected goods and services tax rationalization later in the month [2].

The Nifty's inability to close above the 25,000/25,033 region suggests that buyers are not keen on chasing prices higher, leaving room for potential dips. However, a direct fall below 24,740 would be required to initiate downside plays [2].

References:
[1] https://www.ainvest.com/news/indian-stock-market-drops-tariffs-banking-sector-weigh-sensex-nifty-2508/
[2] https://m.economictimes.com/markets/stocks/news/sensex-tumbles-over-500-pts-nifty-below-24800-after-u-s-moves-to-levy-steep-tariffs/articleshow/123515750.cms
[3] https://www.livemint.com/market/stock-market-news/indian-stock-market-posts-losses-for-second-month-on-us-tariffs-fpi-outflows-11756471181723.html