Why are the Indian stock markets falling?

The Indian stock markets, represented by the Sensex and Nifty indices, have been falling due to a combination of factors, including aggressive selling by Foreign Portfolio Investors (FPIs), disappointing earnings season, and valuation concerns.

How have the Sensex and Nifty performed recently?

The Sensex and Nifty indices have suffered significant losses for the second consecutive session on July 25, with the Sensex tumbling 590 points or 0.7% and the Nifty 50 falling below the 25,000-mark, declining by 196 points or 0.78%.

What is the impact on the broader Indian markets?

The broader markets, including the Nifty MidCap and Nifty SmallCap indices, have also seen substantial losses, falling over 1% each. Sectors like Automobiles, Financials, and Metals have been among the worst hit.

Home / Business and Economy / Indian Stocks Plunge for Second Consecutive Session as Sensex, Nifty Slide

Indian Stocks Plunge for Second Consecutive Session as Sensex, Nifty Slide

25 Jul

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Summary

Sensex and Nifty indices suffer significant losses
Foreign investors aggressively selling Indian stocks
Earnings season disappoints, management cautious

Indian Stocks Plunge for Second Consecutive Session as Sensex, Nifty Slide

The Indian stock market faced significant pressure for the second consecutive session on Friday, July 25. The benchmark Sensex index tumbled 590 points or 0.7%, while the Nifty 50 fell below the 25,000-mark, declining by 196 points or 0.78%.

The broader markets also saw substantial losses, with the Nifty MidCap and Nifty SmallCap indices falling over 1% each. Sectors like Automobiles, Financials, and Metals were among the worst hit.

The primary drivers behind the market's downfall include aggressive selling by Foreign Portfolio Investors (FPIs), who have offloaded Indian equities worth over ₹28,500 crore so far in July. Additionally, the ongoing earnings season has been underwhelming, especially in key sectors like IT and Financials, dampening investor confidence.

Analysts believe that while the headline indices are not excessively valued, the broader markets, particularly small-cap stocks, appear overheated. The lack of a breakthrough in the India-US trade negotiations has also added to the market's woes.

Going forward, the Nifty 50 index faces immediate support at 24,800-24,735, and a breach of this level could lead to a test of the 200-day moving average around 24,000. On the upside, resistance is likely near the 20-day moving average of 25,300.

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