Sensex crashes 786 points intraday, recovers; check key reasons here
Why stock markets are falling: US Trump tariffs, F&O expiry, and FII selling are some of the reasons why Sensex, Nifty are down today
 "Sensex crashes 786 points intraday, recovers; check key reasons here")
Why markets are falling today: Indian equity markets opened sharply lower on Thursday, July 31, 2025, after US President Donald Trump announced a 25 per cent tariff on Indian goods, effective August 1. President Trump also threatened additional penalties over the country's energy purchases from Russia.
The BSE Sensex tumbled 786 points in the intraday to hit a low of 80,695.15. The NSE Nifty50 also slipped below the 24,700 mark in the intraday to hit a low of 24,635, down 220 points from the previous day's close of 24,635.
Last checked, Sensex was trading at 80,937.56 levels, down 544.30 points or 0.67 per cent, while Nifty 50 was down by -162.70 points or 0.65 per cent to 24,692.35 levels. CATCH STOCK MARKET UPDATES TODAY LIVE
Twenty-six of the 30 Sensex constituents were trading in red, including Mahindra & Mahindra, Bharti Airtel, Reliance Industries, Bajaj Finance, Titan, Infosys, ICICI Bank, State Bank of India, and Maruti Suzuki down up to 2 per cent.
In the broader market, the NSE MidCap 100 index was down 0.85 per cent, and the Nifty SmallCap 100 index dropped 0.6 per cent.
All the sectoral indices were in the red. The Nifty Oil & Gas index fell by 1.5 per cent, and the Nifty Auto index by 1.05 per cent. Nifty Energy, PSU Bank, Realty, IT, Metal, Financial Services, Consumer Durables, Pharma falling up to 1 per cent. ALSO READ | Bharat Forge to Tata Motors: Auto stocks fall up to 3% on tariff jolt
Here are the key reasons behind the Sensex, Nifty fall on July 31:
Trump tariff impact
US President Trump announced a 25 per cent tariff on Indian goods, effective August 1. While this is likely to disrupt vital sectors and presents immediate challenges for India's economy, market experts see the additional penalty announced by Trump for India's oil imports from Russia as a major risk. Feroe Azeez, joint chief executive officer at Anand Rathi Wealth, said that the announcement of a 25 per cent tariff on Indian goods, while higher than anticipated, broadly falls within the 15–20 per cent range that markets had been bracing for.
"What requires close monitoring is the structure of the additional penalty linked to arms and energy imports from Russia, which remains undefined at this stage. From a technical standpoint, this move could weigh on near-term export competitiveness and trigger currency volatility if sentiment deteriorates. That said, the overall trade and investment relationship between India and the US still has room for improvement and is not yet in a worrisome zone," Azeez said.
US Fed policy
The Federal Reserve kept its key interest rate steady at around 4.3 per cent for the fifth time this year, despite pressure from President Trump for a cut. Chair Jerome Powell said rate cuts might have happened if not for Trump’s high tariffs, which the Fed is monitoring for their impact on inflation and the economy.
FIIs selling rattles D-Street
Foreign Institutional investors (FIIs) have remained net sellers in the Indian equity markets in July 2025 so far, selling over ₹42,000 crore. This is almost double of what they have net bought in the last four months. ALSO READ | RIL, BPCL lead market sell-off; here's why Oil & Gas stocks are falling
F&O expiry
The monthly expiry of the Nifty 50 derivative contracts is scheduled to expire today. "Recent swing lows of 24598 and 24473 could now act as immediate support levels. On the higher side, the band of 24,900-25,000 would continue to serve as a substantial hurdle for the Nifty, indicating resistance for any upward moves," said Devarsh Vakil, head of prime research at HDFC Securities.
Falling Indian Rupee
The Indian Rupee opened 27 paise lower at 87.70 against the dollar on Thursday, nearing its all-time low mark of 87.95. On Wednesday, the currency recorded its most significant single-day decline since May 8, reaching a five-month low. This sharp fall was primarily driven by increased month-end dollar demand and outflows from foreign funds.