logo
Why stock market is down today: Sensex falls over 600 pts, Nifty slips below 25,000; 5 reasons behind the drop

Why stock market is down today: Sensex falls over 600 pts, Nifty slips below 25,000; 5 reasons behind the drop

Economic Times18-07-2025
Why Stock Market is Falling Today: All major sectors, except metals, were in the red. Financials led the decline, with Axis Bank, HDFC Bank, and Kotak Mahindra Bank dragging the Nifty Private Bank index down.
Stock Market Crash Today: Indian markets experienced a sharp decline on Friday, with the Sensex and Nifty50 falling due to FII selling, Axis Bank's disappointing earnings, and Citi's downgrade of Indian equities. Global uncertainties surrounding US Fed policy and rising oil prices further contributed to the negative sentiment. Financial stocks were particularly hard hit, leading the broad-based market weakness.
Tired of too many ads?
Remove Ads
Here are five key reasons behind the fall:
1. FIIs Turn Negative in July
Tired of too many ads?
Remove Ads
2. Axis Bank's Earnings Miss Spooks Financial Sector
3. Citi Downgrades India to 'Neutral'
Tired of too many ads?
Remove Ads
4. Uncertainty Over US Fed's Next Move
5. Rising Oil Prices
Indian benchmark indices declined sharply on Friday, dragged by selling in financial stocks, weak earnings, and cautious global sentiment. The Sensex fell over 600 points intraday, while the Nifty50 breached the 25,000 mark amid broad-based weakness.At 11:54 am, the BSE Sensex was down 553 points, or 0.67%, at 81,706, and the Nifty50 slipped 153 points, or 0.60%, to 24,959. The total market capitalisation of BSE-listed companies declined by Rs 2.13 lakh crore to Rs 458.74 lakh crore.All major sectors, except metals, were in the red. Financials led the decline, with Axis Bank HDFC Bank , and Kotak Mahindra Bank dragging the Nifty Private Bank index down 1.36%. Auto, FMCG, Financial Services, and Pharma indices also saw losses.The broader market was weak too, with the Nifty Midcap100 and Smallcap100 shedding over 0.5% each.Foreign institutional investors (FIIs), who had supported the Indian market with strong inflows in May and June, have turned net sellers so far in July. This reversal in trend reflects growing caution amid global uncertainties, elevated valuations, and a shift in risk sentiment.In May, FPIs were net buyers to the tune of Rs 19,860 crore, followed by inflows of Rs 14,590 crore in June. However, in the first half of July, they have pulled out Rs 2,660 crore from Indian equities, raising concerns about sustained market strength at current levels."In July, so far, India has been underperforming most markets, with a dip of 1.6% in Nifty. A significant contributor to the decline is the selling by FIIs. There is a clear pattern in FII activity this year so far. They were sellers in the first three months. For the next three months, they turned buyers. And in the seventh month the trends so far indicate further selling unless some positive news reverses the downtrend in the market," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited."Along with selling in the cash market, FIIs have been increasing short positions in the derivatives market too, which reflects a bearish outlook. Elevated valuations in India and cheaper valuations in other markets will continue to influence FII activity," Vijayakumar added.A surprise drop in Axis Bank's quarterly profit due to higher provisions triggered sharp selling in financial stocks. Axis Bank shares fell 6%, making it the biggest laggard on the Nifty50.The disappointment spread across the sector, with HDFC Bank, Kotak Mahindra Bank, SBI , and ICICI Bank also falling. Together, these five lenders contributed around 310 points to the Sensex's overall drop.Citi's downgrade of Indian equities from 'overweight' to 'neutral' also dampened investor sentiment.'India remains the most expensive market, trading at 23x forward earnings, above peers and its historical average,' Citi said. It cited stretched valuations and a moderation in earnings growth expectations as key reasons for the downgrade.While Citi remains positive on India's macro outlook, it prefers selective sectors like banks, NBFCs, healthcare, and telecoms, while staying cautious on IT, metals, and consumer staples.Global sentiment also turned cautious after conflicting signals from US Federal Reserve officials. While Governor Christopher Waller said he expects a rate cut later this year, most officials have pushed back on the idea of an imminent move.Markets now see almost no chance of a rate cut in the July 30 meeting, and only a 62% probability in September — adding to the risk-off mood.Crude oil prices rose sharply following drone attacks in northern Iraq that shut down half of Kurdistan's oil production.Brent crude traded at $69.48 per barrel, and WTI at $67.51. This spike in oil prices has renewed concerns over input cost pressures, especially for oil-importing countries like India.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

India likely to forego ₹4,060 crore in first year of UK trade pact: GTRI
India likely to forego ₹4,060 crore in first year of UK trade pact: GTRI

Business Standard

time19 minutes ago

  • Business Standard

India likely to forego ₹4,060 crore in first year of UK trade pact: GTRI

India is expected to forego customs revenue of ₹4,060 crore in the first year of the free trade agreement with the UK, as tariffs are reduced or eliminated on a wide range of goods, think tank Global Trade Research Initiative (GTRI) said on Monday. The calculation is based on the current import figures from the UK. By the tenth year, it said, as tariff elimination phases-in more broadly, the annual loss is projected to rise to Rs 6,345 crore or around British Pound 574 million, based on FY2025 trade volumes. The India-UK free trade agreement, which was signed on July 24, will lead to a loss of customs revenue for both the countries, as tariffs are reduced or eliminated on a wide range of goods, GTRI added. India imported USD 8.6 billion worth of goods from the UK in 2024-25. Industrial products make up the bulk of these imports and face a weighted average tariff of 9.2 per cent. Most agricultural products, subject to much higher average tariffs of 64.3 per cent, were excluded from tariff cuts, except for items like whisky and gin. It said that India has committed to eliminating tariffs on 64 per cent of the value of imports from the UK immediately as the implantation starts. Overall, India will eliminate tariffs on 85 per cent of tariff lines and reduce tariff on 5 per cent of tariff lines or product categories. "Based on these factors, India's revenue foregone in the first year of the agreement is estimated at Rs 4,060 crore," GTRI Founder Ajay Srivastava said. He added that the UK imported USD 14.5 billion worth of goods from India in the last fiscal year, with a weighted average import tariff of 3.3 per cent. Under the comprehensive economic and trade agreement (CETA), the UK has agreed to eliminate tariffs on 99 per cent of Indian imports. "This translates to an estimated annual revenue loss of British Pound 375 million (or USD 474 million or Rs 3,884 crore) for the UK, again based on FY2025 trade data. As Indian exports to the UK expand, the fiscal impact is likely to grow over time," it said. The implementation of the pact may take about a year as it requires approval from the UK parliament.

How China's BYD is operating by remote control to overcome obstacles in India
How China's BYD is operating by remote control to overcome obstacles in India

Time of India

time19 minutes ago

  • Time of India

How China's BYD is operating by remote control to overcome obstacles in India

How China's BYD is operating by remote control to overcome obstacles in India Alisha Sachdev Bloomberg Jul 28, 2025, 14:04 IST IST Visa hurdles for top BYD management, investment roadblocks from the India government notwithstanding, the Chinese carmaker has proved popular with Indian drivers — sales in the first half of this year are nearly touching the total units sold in 2024 China's BYD is forging ahead with its attempts to expand in India despite roadblocks from the government that are preventing the electric vehicle maker from conducting key business dealings there. Like most Chinese companies, BYD has been unable to obtain visas for executives after a deadly clash between Indian and Chinese soldiers in 2020 sparked a major deterioration in political ties. That's seen the EV giant resort to holding board meetings and high-level business interactions in Colombo in Sri Lanka and Kathmandu in Nepal, and even as far away as Singapore, according to people familiar with the matter.

Removing FDI Cap To Attract Sustained Foreign Investment In Insurance Sector: FM Sitharaman
Removing FDI Cap To Attract Sustained Foreign Investment In Insurance Sector: FM Sitharaman

India.com

time19 minutes ago

  • India.com

Removing FDI Cap To Attract Sustained Foreign Investment In Insurance Sector: FM Sitharaman

New Delhi: With the increase in foreign direct investment (FDI) limit from 74 per cent to 100 per cent for insurance companies, the government aims to unlock the full potential of the Indian insurance sector, which is projected to grow at 7.1 per cent annually over the next five years, outpacing global and emerging market growth, Finance Minister Nirmala Sitharaman said on Monday. According to the minister, this is an enabling provision which will help the interested insurers to explore hiking the FDI percentage. "Further, this will eliminate the need for foreign investors to find Indian partners for the remaining 26 per cent, easing the process of setting up their operations in India, effectively increasing the number of insurers in the country," she said in a written reply to a question in the Lok Sabha. Removing the FDI cap will attract stable and sustained foreign investment, increase competition, facilitate technology transfer, and improve insurance penetration in the country, FM Sitharaman noted. Section 2(7A) (b) of the Insurance Act, 1938, prescribes the upper limit of FDI in an insurance company. The decision to increase the FDI component in a particular insurance company is made by its promoters, depending upon various factors such as the capital requirement of the company, solvency requirement, future business plans, etc, according to the government. The equity share capital of life insurers was Rs 24,110 crore, with the FDI part at Rs 11,529 crore (as on December 12, 2024), as per the IRDAI's data. FM Sitharaman also said that India offers a compelling growth opportunity for foreign banks, and the government is actively encouraging foreign investment in the banking sector. In April, addressing the India-UK Investor Roundtable discussion in London with around 60 investors, representing various pension funds, insurance companies, banks and other financial institutions in London, the Finance Minister outlined priorities of the government for enabling sustained economic growth and investment opportunities with the policy support that is shaping New India. She said that with an expanding middle class and a strong and stable policy environment, India is set to become the sixth largest insurance market by 2032, with the expected growth at 7.1 per cent CAGR from 2024-2028 - one of the fastest growing insurance markets among G20 countries.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store