Sensex falls 650 pts, Nifty below 25k: Why are stock markets falling today?

Share market fall today: NSE Nifty was trading below the key psychological 25,000 level, down by 140 points or 0.56 per cent.

Stock market today: Equity benchmark indices continued to trade lower for the second straight day as D-street analysts raised banners of 'caution' amidst heightened uncertainty on the macro front. At 11:30 AM, the Sensex was down by 486 points or 0.59 per cent, quoting at 81,769.09. The index hit an intra-day low of 81,608 down by 651 points. 

Whereas, NSE Nifty was trading below the key psychological 25,000 level, down by 140 points or 0.56 per cent. The 50-scrip index hit an intra-day low of 24,918.65. 

Nearly all stocks from the Sensex pack were trading in red, with Axis Bank, Bharti Airtel, Kotak Bank, Adani Ports and Bharat Electronics (BEL) among the top laggards. Axis Bank failed to impress D-street investors in first quarter earnings for the financial year 2025-2026 (Q1FY26) as net profits declined 3.8 per cent year-on-year (Y-o-Y) to ₹5,806 crore. Axis Bank shares were trading at ₹1,111.10, down by over 6 per cent on Friday.  On the other hand, Tata Steel, Bajaj Finance, Infosys, Tata Motors and PowerGrid managed to trade in green.

 

 

Even broader markets failed to showcase positive momentum. The Nifty Midcap 100 was trading at 59,255, down by 0.44 per cent. The Nifty Smallcap index followed suit, and was down by 0.43 per cent, quoting 19,034.75. 

 

Almost all sectors were in red with the Nifty private bank among the worst-performing indices, declining 1.32 per cent, trading at 27,575.  However, Nifty Media was up by 0.17 per cent, quoting at 1,757. Nifty Metal also remained in green, up by 0.21 per cent, trading at 9,443.   

Here's why stock markets are down today:

FII selling

Indian markets have so far (in July) underperformed global markets. Analysts believe that the selling spree of foreign institutional investors (FIIs) has been a key contributor to this downward trend. While FIIs were net buyers earlier this year, the elevated valuation of the Indian market as compared to peer markets prompted them to switch gears. In the previous trading session (Thursday), FIIs remained net sellers in the market, offloading equities worth ₹3,694 crore. While domestic institutional investors (DIIs) were net buyers in the market, purchasing equities worth ₹2,820 crore.

 

"Along with selling in the cash market FIIs have been increasing short positions in the derivatives market too,  which reflect a bearish outlook. Elevated valuations in India and cheaper valuations in other markets will continue to influence FII activity," said VK Vijayakumar, chief investment strategist at Geojit Investments.  

Trump tariffs

While speculations around a prospective trade deal between the US and India continue to linger, keeping investor sentiment on edge, there has been no solidified development on trade tariffs as of now. However, hopes remained high ahead of the August 1 tariff deadline. President Trump even said that the US is "very close" to striking a deal with India. "We are very close to a deal with India where they open it [the market] up," Trump told reporters at the White House earlier this week.

Weak Q1 earnings by Axis Bank, IT stocks

So far, the Q1FY26 earnings season has failed to surprise D-street investors. IT giants, including Tata Consultancy Services (TCS) and HCL Tech, reported subdued results for the quarter. This has kept market movement largely muted. However, for the coming weeks, D-street analysts believe that markets will trade range-bound. "Going forward, markets are likely to remain in consolidation mode, with focus on ongoing earnings and progress in US-India trade negotiations," said Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services.