Sensex Fell 572 Points, Nifty Closed Below 24,700 For The 3rd Straight Day — Will This Losing Streak Continue?

The Indian stock market dropped for the third day in a row on Monday, July 28, with the Sensex and Nifty ending at nearly two two-month low as negative news and triggers have pushed the Nifty to a one-month low, and market sentiments continue to be unfavourable. The sharp cut in the IT index has also dragged the market down, and there is no respite in this in view of the 2% cut in its global workforce announced by TCS.

Sensex closed losing 572.07 points or 0.70% to close at 80,891, and the Nifty 50 ended down 156.10 points or 0.63% to 24,680.90. However, Benchmarks outperformed Broader Market Indices.

Top Gainers And Top Losers:

Shriram Finance and Cipla were top Nifty gainers today, rising over 2% despite the negative market movement. It was followed by Heromoto Corp, Asian Paints, Hindustan Unilever and SBI Life.

While Kotak Bank was the biggest nifty loser, falling 7.34% in the trading session. It was followed by Bajaj Finance, IndusInd Bank, Bharti Airtel, and Titan, which fell over 2%.

Nifty IT bounced back slightly, recovering 1% from the day's low, after falling as much as 1.6%. Wipro and TCS were the biggest losers in the Nifty IT index. TCS dropped nearly 2% after announcing 12,000 job cuts due to weak demand.

Most sectoral indices ended in the red, except Nifty FMCG and Pharma. Nifty Realty was the worst-performing sector, losing 4% mainly due to losses in Godrej Properties and DLF.

The BSE Midcap index dropped 0.73%, while the BSE Smallcap index fell by 1.31%.

What Led to Today's Fall?

The decline was triggered by disappointing Q1 results from Kotak Mahindra Bank and lingering uncertainty over US-India trade negotiations. Kotak Mahindra Bank plunged 6.3% after reporting weaker-than-expected Q1 results, with its net interest margin falling more than anticipated. Traders also remained cautious ahead of the US Federal Reserve's monetary policy decision and key US jobs data due later this week, according to tradingeconomics.com,com.

"Domestic market sentiment has remained cautious, weighed down by a disappointing set of Q1 earnings, delays in the India-US trade agreement, and continued FII outflows. In contrast, global markets remain broadly positive, supported by US-EU trade developments that are perceived as less concerning than anticipated.

The upcoming monetary policy decisions from the Fed and BoJ, along with the trajectory of domestic quarterly earnings, are expected to play a pivotal role in shaping market direction in the near term," said Vinod Nair, Head of Research, Geojit Investments.

Nifty Outlook:

"Once again, bears ruled the day as the Nifty fell below 24,700 amid rising weakness in the market. During the session, the index faced resistance around the 50-EMA and remained below it until the close. The RSI continues to support the bears with its negative crossover.

In the short term, the index may remain under pressure, with a possibility of slipping towards 24,550. On the higher end, resistance is seen at 24,800 and 24,950," said Rupak De, Senior Technical Analyst at LKP Securities.

"A reasonable negative candle was formed on the daily chart with upper shadow. Technically, this market action indicates downside continuation pattern with sell on rise opportunity.

The underlying trend of Nifty remains weak and one may expect some more declines in the coming sessions. The next crucial lower supports to be watched around 24500. Immediate resistance is placed at 24800," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Rupee VS Dollar:

The Indian rupee ended the day 16 paise weaker at 86.67 against the US dollar. On Friday, it had closed at 86.51.

"Rupee traded weak by 0.10% at 86.65 as weakness in capital markets weighed on sentiment. The week ahead is expected to remain volatile with key global triggers including the 1st August trade deal deadline with the U.S., along with major U.S. data releases, ADP Non-Farm Employment Change, Non-Farm Payrolls, Unemployment Rate, GDP, and the Federal Reserve's policy decision. The rupee is likely to trade in a range of 86.25-86.90," Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

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