Why Is Market Down Today? The domestic equities markets continued their downward trajectory on Thursday, after falling for the past two sessions. The BSE Sensex on Thursday fell by 526.8 points to trade
at 79,995.6 in the morning trade, while the NSE Nifty declined by 180 points to trade below 24,400 at 24,391.9.
The Nifty Oil & Gas Index, Nifty Metal, and Nifty Auto were hit the most, trading down by 0.90%, 1.10%, and 1.06%, respectively. However, only the Nifty Media was in green rising by 0.51%. In the broader market, the situation was worse, with the midcap and smallcap indices trading down by 0.71% and 0.76%, respectively. Here are the key factors why stock markets are falling today, August 7:
Key Factors Behind Market Fall Today
India-US Trade Tensions After Trump Tariffs
US President Donald Trump on Wednesday imposed an additional 25% tariff on India in response to its continued import of Russian oil. It is over and above the 25% tariff plus penalty he announced earlier, which came into effect on Thursday. India slammed the move as “unfair, unjustified and unreasonable”.
The Trump Tariffs, which are likely to hit sectors such as textiles, marine and leather exports hard, have caused negative sentiments in the market.
“The 21-day window for the additional 25% tariff to take effect leaves room for negotiation and an eventual deal with the US. But there is huge uncertainty… The market is unlikely to panic but weakness will continue in the near-term. Since uncertainty is high investors should be cautious in their approach,” said V K Vijayakumar, chief investment strategist of Geojit Investments Ltd.
At least in the near-term, export-oriented sectors will remain weak. Domestic consumption themes like banking and financials, telecom, hotels, cement, capital goods and segments of automobiles will remain resilient, he added.
The latest 25% tariff hike by the US will be effective only from August 28, before which the US delegation is expected to visit India to negotiate on tariffs.
Heavy FII Selling
Foreign Institutional Investors offloaded equities worth Rs 5,000 crore, while Domestic Institutional Investors purchased equities worth Rs 6,794.3 crore on Tuesday, according to exchange data.
FIIs have sold Indian equities worth over Rs 16,500 crore in the past one week, over Rs 32,200 crore in two weeks, and over Rs 52,800 in the past 30 days in the cash segment.
Crude Oil Rises 1%
Oil prices rose 1% on Thursday, pausing a five-day losing streak, on signs of steady demand in the US, the world’s biggest oil user, though uncertainty about the macroeconomic impacts of US tariffs limited gains. Brent crude futures rose 62 cents, or 0.9%, to $67.51 a barrel by 0342 GMT while US West Texas Intermediate crude was at $65.03 a barrel, up 68 cents, or 1.1%.
Both benchmarks slid about 1% to their lowest in eight weeks on Wednesday after U.S. President Donald Trump’s remarks about progress in talks with Moscow.
Volatility On Nifty Expiry
Today is Nifty expiry, which typically raises volatility in the market.
“The Nifty remained under pressure and failed to move beyond its key Call bases. While couple of heavyweights have helped Nifty to limit the declines, broader markets remain weak. For today’s weekly settlement, we believe that Nifty may try its best to hold 24500 levels below which weakness may extend. FII’s Index futures continue to remain at elevated levels. Hence, we expect, India VIX is likely to move higher towards 14 levels in the coming sessions,” ICICI Securities said in its note.
The India VIX, which indicates fear in the market, on Thursday rose 1% to 12.08, as of 11:49 am.
RBI Hawkish Stance
“The RBI’s neutral stance despite holding repo rates at 5.5% is seen as hawkish, further dampening sentiment,” said Prashanth Tapse, senior vice-president (research) of Mehta Equities Ltd.
He added, “Bears have taken control of the Dalal Street today amid multiple headwinds — Trump’s tariff hike on Indian goods, heavy FII selling, a weak Q1FY26 earnings season, rupee depreciation towards 87.83, and a deteriorating Nifty technical setup.”
