Sensex Crashes 500 Points, Nifty Drops Below 25,000 - Here’s Why the Market Ended the Week In Red

Indian stock market closed the week, witnessing a fall on July 18, extending losses from the previous session and hitting its lowest level in three weeks. The Sensex dropped 502 points, while the Nifty 50 declined 143 points. The decline was mainly driven by weakness in banking, financial services, Auto, and tech sectors.

The Sensex dropped 502 points or 0.61% to close at 81,757.73, while the Nifty 50 declined 143 points or 0.57% to 24,968.40. Mid-cap and small-cap stocks performed worse than the main indices dropping by almost 1% each.

Top Gainers And Losers:

Out of the 50 Nifty stocks, 25 declined this week. Top losers included Axis Bank, HCL Tech, Bharat Electronics (BEL), and Kotak Bank, while Wipro, Bajaj Finance, Tata Steel, ONGC, and Nestle India were among the top gainers.

Most sectoral indices ended in the red, with pharma, private banks, PSU banks, FMCG, capital goods, consumer durables, and telecom falling between 0.5% and 1%. The BSE Midcap and Smallcap indices also slipped 0.6% each.

Nifty Bank index fell nearly 1%, making it the worst-performing sector of the day, mainly due to losses in Axis Bank and HDFC Bank.

The Nifty Realty index broke its four-day winning streak, and the Nifty FMCG index also ended its five-day rally. The Nifty Financial Services sector continued to fall for the third straight day.

In contrast, the Nifty Media index rose over 1%, supported by strong gains in TV18 Broadcast and Saregama, marking its second day of gains.

For the week, the defence sector dropped the most, falling 4%. The IT sector was also among the top losers due to weak quarterly results. Meanwhile, media, realty, and PSU bank indices managed to post gains in an otherwise flat week.

Why Did the Market Fall Today?

The initial Q1 FY26 results have disappointed investors who were hoping for a strong earnings recovery this quarter. And, the company leaders are staying cautious due to global uncertainty, which seems to be affecting overall market sentiment.

Traders remained cautious amid ongoing uncertainty over trade deals with the US ahead of the August deadline. Concerns were also heightened as investors awaited earnings results from several companies, including Reliance Industries, which is set to announce its results later today.

"A broad-based sell-off was observed in the national market amidst a disappointing initial set of earnings from the finance and IT sectors. Elevated valuations in large-cap stocks, coupled with significant net short positions held by FIIs, have contributed to a cautious sentiment among investors.

Moreover, additional tariff threats are also casting a shadow on India over its trade relationship with Russia. Despite these pressures, the medium- to long-term outlook for India remains optimistic, supported by low inflation levels and proactive monetary authority committed to sustaining economic growth," said Vinod Nair, Head of Research, Geojit Investments.

Nifty Outlook:

"The Nifty remained under selling pressure, falling towards 24,900 where it found initial support. The index stayed above the 50-day moving average (50DMA) and appears poised for a short-term pullback after a sharp correction. However, it remains a 'sell on rise' as long as it trades below 25,260. On the downside, selling may intensify if it breaks below 24,900," Rupak De, Senior Technical Analyst at LKP Securities.

"A small positive candle was formed with long lower shadow on the daily chart which indicates a possibility of an emergence of buying interest from near the crucial supports of around 25300 levels. The higher bottom reversal pattern needs to be confirmed with more upside," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"Nifty on the weekly chart formed a reasonable negative candle pattern this week after an excellent upside breakout of broader high low range of around 24500-25200 levels in last week.The next upside to be watched around 25700 for next week and 26200 for the next two weeks and immediate support is placed at 25300," added Nagaraj Shetti, Senior at HDFC Securities.

Rupee VS Dollar:

The rupee ended 8 paise lower against the US dollar, closing at 86.16. It had closed at 86.08 per dollar on Thursday.

"The Indian Rupee has experienced depreciation against the US Dollar, consistent with the broader trend observed across Asian currencies. This downturn is primarily attributed to weakened market sentiment following the recent pronouncements by the US President regarding a prospective extra 10% tariff on BRICS," said Dilip Parmar, Research Analyst, HDFC Securities.

"The USDINR pair is anticipated to exhibit a continued southward trajectory until greater clarity emerges concerning the proposed trade agreements with US. The pair currently faces resistance at 86.30 and finds support at 85.30. The prevailing market bias indicates a favorable outlook for the US Dollar against the Indian Rupee," added Dilip Parmar of HDFC Securities.

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