Indian Markets End July On A Volatile Note Amid Global Uncertainty and Tariff Woes

If you thought July was all about rain and mangoes, think again. The Indian markets had their own monsoon of events, from global tariff tantrums to FII swings. This pullback was driven by a mix of domestic challenges and global hindrances, including the recently imposed 25% tariffs on Indian exports to the U.S. by President Donald Trump

After a four-month rally, July 2025 decided to surprise us. Nifty 50 and Sensex dipped nearly 3%, midcaps stumbled (down 3.4%), and small caps felt the brunt (a 5.1% drop). Globally, India ranked as the fifth-worst performing equity market in July, following Brazil (-8.4%), Botswana (-5.6%), Lebanon (-4.2%) and Chile (-4.1%). India’s BSE market cap saw its sharpest monthly drop in five months. According to Bloomberg, the total valuation of BSE-listed companies fell by 3.6%, from $5.38 trillion in June to $5.2 trillion in July.

Sectoral Spotlight: Pharma Leads, IT Lags

Pharma led the charts with a solid 3.9% gain, followed by healthcare (3.3%) and FMCG (1.9%), fueled by earnings revival and improving rural consumption, especially visible in Hindustan Unilever’s results. In contrast sectors like Consumer Durables, Auto and Finance witnessed modest losses (0.6% to 1.3%). Metals and Banking underperformed too, dragged by weak global demand and softening credit offtake.

IT got hit hardest, plunging nearly 9%. From global tech sell-offs and cautious revenue guidance, this sector felt the brunt. TCS to add salt to the wound, announced a 2% workforce trim despite showing FY25 revenue growth.

FII's New Stance and IPO Momentum

After three months of consistent buying, Foreign Institutional Investors net sold Indian equities worth over ₹42,000 crore in July. So far in 2025, FII’s have pulled out a total of ₹1.57 lakh crore, even as Domestic Investors continued to support the markets with net purchases worth ₹4.02 lakh crore.

Market experts attribute this to overvalued equity markets and more attractive opportunities in cheaper emerging economies. Bajaj Broking called it a strategic reallocation “towards safer or undervalued assets.”

On the IPO front, after a sleepy first half, July was sizzling with 14 mainboard listings, including soaring Anthem Biosciences, GNG Electronics, Crizac and NSDL. However, IPOs like Indiqube Spaces and Brigade Hotels saw below-par listings too. Anticipated debuts include Lenskart, Tata Capital, Meesho, Milky Mist and Hero Motors, while Reliance Jio hit pause to chase better pricing.

Key Triggers for August

Mark your calendars: August 8 brings the RBI’s monetary policy meeting. Investors will watch for commentary around inflation, liquidity and GDP outlook.

Other triggers include:

• Q1 earnings from major companies like Bharti Airtel, DLF, Tata Motors, SBI and LIC.
• Progress of the Indian monsoon
• Crude oil price fluctuations

The Trump Card

Over the past few years, trade tensions between India and the USA have seen several escalations with both countries imposing tariffs on each other’s goods. For India, this tariff escalation comes at a time when exports are already facing pressure from a slowing global economy and rising input costs.

But here's the twist. On August 1, the U.S. announced plans to double down with a 50% tariff, opening a 21-day window for discussions. And on August 7, they officially rolled out the new rates. This could have ripple effects, especially in sectors like metals and manufacturing. The tariff war is expected to impact MSMEs and export-oriented sectors the most, potentially influencing India’s trade surplus with the U.S.

Mintit’s Take

In unpredictable times, there’s one strategy that’s quietly powerful; Consistency. Whether it’s the news channels doing a will-they-won’t-they or global tariff making headlines, a well-chosen SIP mutual fund continues to build wealth, brick by brick.

Take a deep breath. If you’re disciplined with your monthly systematic investment plan, short-term noise doesn’t shake your long-term vision. Diversification, long-term vision, and disciplined investing through a well-structured sip investment scheme can help weather these unpredictable events.

At Mintit, we are all about helping you stay the course with tools that simplify your investments, track them beautifully and nudge you when needed. Because, real growth? It’s not in chasing trends. It’s in showing up every month, just like your SIP.