Why is the Indian Market going down?
August 10, 2025
The Indian Stock Market Crash in 2025 on Tariffs/FII out Not to Forget Weak Earnings Rupee Fall Trying to get Silly. Read Cover Here is what you need to know why indian markets falling
1. Escalating U.S. Tariff
Investor sentiment shifted after the U.S. abruptly doubled its tariffs on Indian exports to 50%, up from 25%. While the Nifty 50 has only a small direct exposure to the U.S., export-oriented sectors such as textiles, leather, gems & jewellery, chemicals and auto ancillaries are taking a hit. According to Morgan Stanley, just the seafood industry could suffer a loss of ₹24,000 cr.
2. Sustained Foreign Institutional Investor (FII) Foreign
Investors remain net sellers. This has led to nearly ₹18,000 crore being pulled out in August itself, increasing pressure on the domestic market. The
3. Weak Corporate Market
The results of Q-1 have disappointed, providing little comfort to the market. Weak corporate performance has left little on the positive side.
4. Market Sentiment & Technical
This is the sixth week-on-week decline for the Nifty50 and Sensex, they had posted such a consecutive fall in the week ended April 24, 2020. Weak momentum and resistance levels are raising concerns that the recovery will struggle
5. Currency Devaluation & Economic
Bucking the trend, rupee has tanked against most other major currencies – depreciation by nearly 3% in July Siddhartha Shukla | New Delhi Last Updated at August 1, 2018 16:06 IST FDI collapsed 98% YoY; consumption disappointed on many counts and capital expenditure remained muted.
6. Broader Market Pressures & Macro Concerns
Fears of rich valuations, a gaping PE multiple ceiling and structural issues such as high-interest rates and inflation are thereby fueling bearish sentiment.
At a Glance: Converging Factors Behind the Downturn
| Trigger | Impact on Market |
|---|---|
| U.S. tariff hikes | Clustered selling in export-driven sectors; heightened uncertainty. |
| FII outflows | Liquidity drain, sapping market momentum. |
| Disappointing Q1 results | Eroded confidence in corporate earnings trajectory. |
| Six-week decline streak | Signals a strong bearish trend (longest since 2020). |
| Weak rupee & capital flight | Increases cost pressures, shrinking external investment. |
| Macro/valuation pressures | Higher valuations + inflation/inflationary risk = amplified caution. |
Final thoughts
The matter is actually based on sound fundamentals of external shocks – tariffs, global sentiment and earnings, currency and internal stressors – FII outflows. While the medium-term narrative of India’s growth story is in place yet strength of economy, we could see more near-term volatility as these broader pressures persist.
