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Equity markets in India nosedived on Friday, mirroring global market jitters, with benchmark indices suffering broad-based losses. The BSE Sensex plunged over 700 points, while the Nifty50 fell below the crucial 24,850-mark, weighed down by financial stocks, particularly Bajaj Finance, amid fresh concerns over asset quality and global trade uncertainty
The market capitalisation of BSE-listed firms eroded by Rs 4.75 lakh crore, shrinking to Rs 453.35 lakh crore.
Top 5 Reasons Behind Today’s Market Rout
1. Financials Crumble After Bajaj Finance Earnings
The biggest drag came from the financial sector:
- Nifty Financial Services index dropped over 1%
- Bajaj Finance tanked 5.5% despite reporting strong quarterly earnings
- Bajaj Finserv declined 4.5%, with Axis Bank, HDFC Bank, and Kotak Bank also slipping up to 1%
Concerns over asset quality in the MSME (micro, small, and medium enterprise) segment spooked investors. Bajaj Finance emerged as the top laggard on Nifty50.
2. US-India Trade Deal Negotiations Stalled
Investor mood soured amid uncertainty over an interim trade deal with the U.S.:
- Talks remain deadlocked ahead of the August 1 deadline, especially on agricultural and dairy tariffs
- India’s trade delegation returned from Washington without progress, adding to unease
- Lack of formal communication from Washington has deepened pessimism
3. Relentless FII Selling
Foreign institutional investors (FIIs) have sold Rs 11,572 crore worth of Indian equities in just four sessions. “The near-term market construct has turned weak,” said Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services. “Sustained FII selling and correction in broader markets—especially overvalued smallcaps—will likely keep pressure on indices.”
4. India-UK Free Trade Agreement Fails to Excite Markets
The much-awaited India–UK Free Trade Agreement (FTA) was signed during PM Modi’s London visit. While it opens doors for:
- Textiles, whisky, and automobile exportsAnalysts believe:
- The deal lacks immediate triggers without progress on U.S. trade negotiations
5. Weak Global Cues and Profit Booking
Asian markets mirrored the risk-off sentiment:
- Nikkei dropped 0.5% from record highs
- Hang Seng, ASX 200, Shanghai Composite all declined between 0.5%–0.7%
Investors await key risk events:
- US Fed policy meeting
- US jobs data
- Big Tech earnings (Apple, Amazon, Meta, Microsoft)
Broader Market Carnage
| Index/Sector | Change |
|---|---|
| Nifty Auto | –1.3% |
| Nifty Financial Services | –1.0%+ |
| Nifty Midcap100 | –1.2% |
| Nifty Smallcap100 | –1.5% |
| PSU Bank, IT, Metal, O&G | –0.7% to –1.3% |
Market Outlook
With global volatility, uncertain trade flows, and no relief from FII outflows, the near-term outlook remains bearish. Analysts advise staying cautious, with a focus on defensive sectors and high-quality largecaps until the dust settles.
