Indian equity markets slid nearly 1% on Friday, wrapping up their fourth consecutive week in the red, as disappointing earnings from large-cap companies and weak global cues spooked investors.
The NSE Nifty dropped 225.10 points, or 0.9%, to close at 24,837.00, while the BSE Sensex fell 721.08 points, or 0.8%, to settle at 81,463.09. Over the past week, the Nifty declined 0.5%, and the Sensex shed 0.4%.
“The fall in the markets today was largely due to bearish earnings by heavyweights like Nestle and Bajaj Finance, which indicate a slowdown in the consumer economy,” said Pranay Aggarwal, Director and CEO of Stoxkart. “There is also investor nervousness around the India-US trade deal.”
Nestle emerged as the biggest loser on the Nifty. Shriram Finance and IndusInd Bank also fell sharply, losing 3.6% and 2.6%, respectively.
Sectoral Pain
Banking, metal, IT, and auto stocks bore the brunt of the selloff. The Nifty PSU Bank Index fell 1.7%, while the Bank Nifty lost 0.9%. Nifty Metal and Nifty IT slid 1.6% and 1.4%, respectively. The Nifty Auto Index was down 1.3%.
India’s Volatility Index (VIX), considered a measure of market fear, spiked 5.2% to 11.3, signalling heightened risk perception among traders.
Broader markets underperformed the benchmarks. The Nifty Midcap 150 dropped 1.6% and the Smallcap 250 tumbled 2% on Friday. For the week, the small-cap index fell 3%, while mid-caps lost 1.6%.
Out of 4,154 stocks traded on the BSE, 2,969 declined and only 1,061 advanced — highlighting broad-based selling.
Global Drag
Asian markets mirrored the weak sentiment. Hong Kong’s benchmark declined 1.1%, Japan fell 0.9%, and China eased 0.3%. Taiwan ended marginally lower, while South Korea managed a modest 0.2% gain.
Technical Picture: Key Support Breached
Technical analysts said that after months of rally, the markets are undergoing a price correction triggered by weak results and valuation concerns.
“Initially, it was a time-wise correction in July that kept markets range-bound, but today the Nifty decisively breached the key support level of 24,950,” said Ruchit Jain, Head of Technical Research at Motilal Oswal Financial Services. “This suggests a price-wise correction is likely in the short term. The next key level to watch is 24,650, which may offer a good buying opportunity.”
Despite the recent pullback, the Nifty is still up 3.3% over the last three months. The Nifty Midcap and Smallcap indices have surged 9.2% and 12%, respectively, over the same period.
FPI Selling Continues
Foreign portfolio investors (FPIs) sold equities worth ₹1,980 crore on Friday, continuing their July selling spree, which now totals ₹22,288 crore. Domestic institutional investors (DIIs) remained net buyers, purchasing shares worth ₹2,138.6 crore.
Jain noted that while July is usually a strong month for markets, this year might end differently. “The benchmark gained significantly between April and June, unlike in prior periods when July typically ended on a positive note,” he said. “This prior outperformance and the ongoing correction suggest that July is likely to close lower.”
Still, both Jain and Aggarwal believe the broader trend remains bullish. “These are short-term corrections within a longer-term uptrend,” said Jain. Aggarwal added that the uncertainty over the US-India trade deal is likely to keep markets sideways in the near term, but once there’s clarity, a rebound is possible.
