Indian stock markets came under pressure on July 31, 2025, as a double blow from geopolitical tensions and monetary policy weighed heavily on investor sentiment. The Nifty 50 fell 141 points to 24,714, while the Sensex tumbled 460 points to 81,022, with steep losses seen in IT, metal, and realty sectors.

The sharp market selloff was triggered after U.S. President Donald Trump announced 25% tariffs and an additional penalty on Indian imports, citing India's purchase of Russian military equipment and oil. In a post on Truth Social, Trump called India a "friend" but added that its "high tariffs" warranted strict trade action.

Adding to the nervousness was the U.S. Federal Reserve's decision to keep interest rates unchanged at 4.25–4.5%, following its July 29–30 FOMC meeting. While the Fed adopted a neutral stance, global investors remained cautious amid persistent inflation concerns and lack of dovish signals.

IT Stocks Under Heavy Selling
The Nifty IT index fell 1% to 35,161, breaking a two-day winning streak. Coforge and Wipro were among the worst performers, losing nearly 2% each, while Infosys, Mphasis, and TCS fell over 1%. Stocks like Persistent Systems, Tech Mahindra, and HCL Technologies also saw marginal declines.

Sentiment in the sector remains fragile following TCS’s recent layoffs, triggering concerns over industry-wide demand softness. Bhavik Joshi, Business Head at INVasset PMS, noted, "IT stocks are still under pressure due to hiring freezes and demand uncertainty. The recovery may take longer than expected as clients remain cautious with budgets."

Metal Stocks Slide on Tariff Fears
The Nifty Metal index dropped nearly 1% to 9,331, extending its losing streak for the second straight session. Hindustan Copper slumped over 4%, followed by Adani Enterprises, which dropped 1.5% ahead of its Q1FY26 results. Other major losers included NMDC, Jindal Steel, Hindustan Zinc, and Welspun Corp, all down over 1%.

“Metals are bearing the brunt of tariff anxiety, but the correction could present a buying opportunity if global stimulus measures kick in,” said Joshi.

Realty Stocks Also Face Pressure
The Nifty Realty index fell over 1% to 907, weighed by losses in Sobha, Oberoi Realty, Phoenix Mills, and Raymond, which declined around 2% each. Prestige Estates and Anant Raj fell more than 1%, while DLF and Brigade Enterprises saw marginal weakness.

Despite the dip, analysts remain optimistic. Joshi added, “Real estate is quietly gaining strength, with strong institutional demand and rising rentals—this could be an early indicator of a broader upcycle.”

Broader Market Outlook
Sectoral indices for IT, metals, and real estate were down over 1% each, underperforming the benchmark indices, which fell around 0.6%. The market mood was further clouded by geopolitical uncertainty, monetary policy ambiguity, and mixed technical signals.

Hardik Matalia of Choice Equity Broking advised caution: “Traders should follow a ‘sell-on-rise’ strategy. A sustained move above 25,000 on Nifty is needed for fresh bullish momentum.”

Meanwhile, Utsav Verma, Head of Research at Choice Broking, noted that while short-term volatility will persist, trade negotiations between India and the U.S. are expected to progress, with many anticipating a settlement tariff of around 15%.

"The market is likely to remain rangebound, focusing on earnings and global cues. Panic selling seems unlikely, but sentiment has turned defensive," Verma added.