Why Did Stock Market Fall Today? Know Key Factors Behind Sensex, Nifty Decline On July 25

Last Updated:July 25, 2025, 16:06 IST

The Indian stock market continued to reel under pressure for the second consecutive session on Friday; Why is Sensex, Nifty falling today?

Why Is Market Falling Today: The Indian stock market continued to reel under pressure for the second consecutive session on Friday, July 25. Benchmark indices—the Sensex and the Nifty 50—suffered significant losses, while mid- and small-cap segments declined even further.

The 30-share BSE Sensex fell 721 points, or 0.88%, to settle at 81,463, while the broader NSE Nifty declined 225 points, or 0.90%, to close at 24,837.

The total market capitalisation of BSE-listed companies fell by Rs 6.5 lakh crore, dropping to Rs 451.6 lakh crore.

Bajaj twins, PowerGrid, Tata Motors and Infosys were the top Sensex losers, bleeding up to 5 per cent. Shriram Finance, Bajaj Auto, Hero MotoCorp, IndusInd Bank, and Wipro were some of the other losers on the Nifty index.

In the broader markets, the Nifty MidCap index fell 1.09 per cent, and the Nifty SmallCap index edged 1.44 per cent lower.

Among sectors, the Nifty Auto index slipped 1.33 per cent, followed by the Nifty Financial Services index (down 0.95 per cent) and the Nifty Metal index, down 1.21 per cent.

On the contrary, the Nifty Pharma, and Realty indices were bucking the weak trend to add 0.2 per cent each.

Why is the Indian Stock Market Falling?

1. Uncertainty Over India-US Trade Deal

Despite ongoing negotiations, there’s no clear breakthrough on a potential India-US trade agreement. While the US has already signed trade pacts with several Asian economies like Japan, Vietnam, Indonesia, and the Philippines, talks with India remain inconclusive.

The primary hurdle appears to be the US demand for greater access to India’s agricultural, dairy, and genetically modified (GM) product markets—an area where India continues to protect domestic interests. However, Commerce Minister Piyush Goyal recently said that talks are making “fantastic” progress and India could receive preferential trade treatment, offering a glimmer of hope.

2. Foreign Investor Selling Picks Up Pace

Foreign Portfolio Investors (FPIs) have been aggressively offloading Indian equities. So far in July, FPIs have sold stocks worth ₹28,528 crore in the cash segment, including ₹11,572 crore in just the last four trading sessions.

“The primary reason for the decline is continuous FII selling in both equity and F&O segments. Valuation concerns persist despite strong macro and micro fundamentals,” said Santosh Meena, Head of Research at Swastika Investmart Ltd.

3. Muted Q1 Results Drag Sentiment

The Q1FY26 earnings season has been underwhelming, especially in key sectors like IT and financials. While some companies have managed to meet estimates, more have missed the mark. Moreover, cautious commentary from management teams has added to investor concerns.

“The earnings season so far hasn’t been disastrous, but it hasn’t inspired much confidence either,” Meena noted, adding that delays in the US-India trade deal are further dampening sentiment.

4. Valuation Concerns in Broader Markets

Analysts believe that while headline indices like the Nifty aren’t excessively valued, broader markets—particularly small-cap stocks—appear overheated.

“The near-term market construct looks weak. Small-caps could remain under pressure as their valuations are difficult to justify amid subdued earnings,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

5. Key Technical Levels Breached

The Nifty 50 has fallen below the critical 25,000 mark, raising fears of further downside. According to Akshay Chinchalkar of Axis Securities, Thursday’s bearish candle pattern completed another rare “bearish engulfing,” indicating a dominant downtrend.

“Support lies at 25,000, with resistance at 25,245. Bears remain in control unless we see a close above 25,340,” he said.

Meena of Swastika Investmart added that the immediate demand zone lies between 24,800 and 24,735. If breached, the index could test the 200-day moving average around the 24,000 level. On the upside, resistance is likely near the 20-DMA of 25,300.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More

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