Sensex Crashes 700 Points, Nifty Drops Below 24,850 - Here’s Why the Market Ended the Week in Red

Indian stock market closed the week witnessing a fall of Around 1% on July 25, extending losses from the previous session and hitting its lowest level since mid-June. The decline was due to weak earnings from Bajaj Finance and selling by foreign investors, which hurt investor confidence. The decline was dragged by the poor performance in the tech and financial services sectors.

The Sensex dropped 721.08 points or 0.88% to close at 81,463.09, while the Nifty 50 declined 225.10 points or 0.90% to 24,837. The market experienced a broad sell-off, with mid-cap and small-cap stocks losing even more. The BSE Midcap index dropped by 1.46%, and the Smallcap index fell sharply by 1.88%.

Top Gainers And Losers:

Bajaj Finance, Bajaj Finserv, Shriram Finance, IndusInd Bank, and Bajaj Auto are some of the biggest losers on the Nifty today. On the other hand, Cipla, SBI Life Insurance, Apollo Hospitals, Dr Reddy's Labs, and HDFC Life are among the gainers.

Almost all sectoral indices closed lower, except Nifty Pharma and Healthcare. Nifty Media was the worst performer, falling 2.6%.

Other major sectors like Energy, PSU Bank, Oil & Gas, Metal, IT, Auto, and Consumer Durables also dropped by more than 1% each. Nifty Bank, Financial Services, FMCG, and Realty also ended the day in the red.

"The Nifty Midcap 100 Index plunged 1.61%, while the Nifty Smallcap 100 Index plummeted 2.10%. Market breadth remained weak for the seventh consecutive day, where declining shares surpassed advancers. The advance-decline ratio on the BSE stood at 0.40, the lowest since 19-June," said Nandish Shah - Deputy Vice President, HDFC Securities.

Why Did the Market Fell Today?

Ongoing uncertainty over the US-India trade talks ahead of the August 1 deadline continues to hurt investor confidence. The market has also been dragged down by weak company earnings, delays in finalizing the trade deal, and steady selling by foreign investors. On top of that, high stock valuations in the Indian market are adding more pressure.

"Subdued corporate results and lacklustre global cues triggered a broad-based sell-off across domestic equities. Elevated valuations in large-cap stocks, coupled with significant net short positions held by FIIs, added to the downward pressure.

Investor sentiment remained fragile amid ongoing uncertainty over U.S.-India tariff negotiations and the ECB maintaining the status quo, with rate cuts deferred until clearer insights emerge on the inflationary impact of trade developments. Moderation in DII inflows after the strong buying of the last 2-3 months due to a muted earnings season and persistent FII selling continues to impact the current market," said Vinod Nair, Head of Research, Geojit Investments.

Nifty Outlook:

"Nifty violated the previous swing low support of 24882 on closing basis. Positional trend of Nifty has turned bearish as it has also violated its 50 DEMA for the first time since 11th April 2025, which further confirms the weakness in the Indian market. Supports for the Nifty are now seen at 24742 and 24500 levels. On the upside, resistance has shifted down to 25000," said Nandish Shah - Deputy Vice President, HDFC Securities.

"Nifty remained under sustained selling pressure as the index slipped below the crucial support level of 24,900. Moreover, it has closed below the 50-day Exponential Moving Average (50EMA) for the first time in several sessions, signaling a meaningful weakening of the ongoing trend. The current setup appears notably weak and suggests the possibility of a deeper correction.

If the Nifty fails to reclaim levels above 24,900 in the next session or two, bulls could face significant short-term challenges. On the downside, immediate support is seen at 24,700, followed by 24,500. On the upside, resistance is now placed around 25,000," said Rupak De, Senior Technical Analyst at LKP Securities.

Rupee VS Dollar:

The rupee closed 11 paise lower at 86.52 against the US dollar on Friday. On Thursday, it had closed at 86.41.

"Rupee traded weak, slipping below 86.50 with a 0.13% decline against the dollar, as the USD traded higher near 97.68. Rising dollar strength and profit booking in capital markets weighed on the rupee. Market focus now shifts to next week's U.S. Federal Reserve interest rate decision, where mixed views are expected amid U.S. government pressure for a rate cut.

In the near term, the rupee is likely to trade in a range of 86.00-87.00," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

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