Indian Stock Market Declines Amid US Tariff Concerns and Foreign Fund Outflows

Indian stock market indices Sensex and Nifty declined in early trade amid concerns over US tariffs and sustained foreign fund outflows. Sun Pharma fell 5% after reporting a 20% YoY decline in consolidated net profit. Hindustan Unilever, ITC, Asian Paints, and Maruti were among the gainers. Foreign Institutional Investors offloaded equities worth ₹5,588.91 crore on Thursday.

Indian stock market indices Sensex and Nifty declined in early trade on Friday, July 2, 2025, amid concerns over U.S. tariffs and sustained foreign fund outflows. The benchmark BSE Sensex fell 0.28% to 80,970.31 points, while the NSE Nifty dropped 0.33% to 24,685.15 points as of 10:02 a.m. IST [1].

Fourteen of the 16 major sectors in India declined, with broader smallcap and midcap indices falling about 0.75% each. Sun Pharmaceutical Industries (SUN.NS) was the worst performer, losing 4% after reporting a 20% year-on-year (YoY) decline in consolidated net profit for the quarter ending June 2025 [3]. Hindustan Unilever (HLL.NS), ITC, Asian Paints, and Maruti Suzuki India were among the gainers, with Hindustan Unilever rising 4% after posting higher quarterly profit amid a rural recovery [1].

Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,588.91 crore on Thursday, contributing to the market's downward trajectory. Analysts attributed the market's decline to U.S. tariffs, persistent foreign outflows, and soft earnings [1]. The trade talks between India and the United States are continuing, with U.S. President Donald Trump reiterating the 25% duty on India as a pressure tactic ahead of a trade deal deadline [1].

The tariff threat comes as the U.S. has set various rates on exports from countries such as Canada (35%), Brazil (50%), Taiwan (20%), and Switzerland (39%). These tariffs have introduced heightened uncertainty and policy unpredictability, complicating business planning [2]. While some measures were expected, several came as a surprise, impacting exports from multiple nations [4].

The Indian market's cautious sentiment was also reflected in the performance of other sectors. Oil & gas shares weighed on the indices, while FMCG stocks outperformed. City Union Bank rallied 2.7% on higher first-quarter profits, while PB Fintech fell 1.6% after announcing its Q1 results [2].

In conclusion, the Indian stock market indices declined on Friday, reflecting investor concerns over U.S. tariffs and foreign outflows. While some sectors and stocks performed well, the overall market sentiment remained cautious. The trade talks between India and the United States will continue to influence market performance in the coming days.

References:
[1] https://www.reuters.com/world/india/indian-shares-slip-us-unleashes-steep-tariffs-2025-08-01/
[2] https://www.nasdaq.com/articles/sensex-nifty-open-lower-economic-concerns
[3] https://www.ndtvprofit.com/markets/sun-pharma-shares-decline-over-5-as-q1-profit-falls-20
[4] https://economictimes.indiatimes.com/markets/stocks/live-blog/bse-sensex-today-live-nifty-stock-market-updates-01-august-2025/liveblog/123032758.cms