Indian Stock Markets Decline for Second Consecutive Day

On 25 July 2025, Indian stock markets witnessed a significant decline for the second consecutive day, with the Bombay Stock Exchange (BSE) Sensex falling by 721.08 points, equivalent to a decrease of 0.88 per cent. This decline brought the index to a level not seen in over a month, closing at 81,463.09. During intraday trading, the Sensex experienced a further drop, reaching a low of 81,397.69, marking a 0.95 per cent decrease.

The Nifty 50 index, which comprises 50 of the largest publicly traded companies in India, also faced a downturn, dropping 225.10 points or 0.90 per cent to end at 24,837.

Investor sentiment was significantly impacted by negative trends in both Asian and European markets, which added to the selling pressure observed during the trading session. Vinod Nair, the Head of Research at Geojit Investments Limited, commented on the situation, stating, "Subdued corporate results and lacklustre global cues triggered a broad-based sell-off across domestic equities. Elevated valuations in large-cap stocks, coupled with significant net short positions held by Foreign Institutional Investors (FIIs), added to the downward pressure."

Among the companies listed on the Sensex, Bajaj Finance saw a notable decline of 4.73 per cent following the announcement of its quarterly earnings. Other companies facing losses included Power Grid, Infosys, Tech Mahindra, Bajaj Finserv, Trent, Tata Motors, NTPC, and Adani Ports. Conversely, Sun Pharmaceutical Industries and Bharti Airtel emerged as the few gainers in an otherwise negative trading environment.

Foreign Institutional Investors sold equities worth ₹2,133.69 crore, as reported by the exchanges, highlighting a trend of outflows that has influenced market conditions. In contrast, Domestic Institutional Investors purchased stocks valued at ₹2,617.14 crore, suggesting a differing approach to market dynamics.

The broader context also saw a pessimistic performance in Asia, with major indices such as the Nikkei 225, the Shanghai Composite, and the Hang Seng all recording losses, while the South Korean Kospi index registered a slight gain. European markets also opened lower, reflecting widespread investor caution. In the United States, markets closed mixed on 24 July, reflecting uncertain trading climates.

Amidst these economic fluctuations, a notable development occurred when India and the United Kingdom signed a historic free trade agreement. This deal, which is expected to facilitate zero-duty access for 99 per cent of Indian exports to the UK starting in the upcoming year, aims to double the current trade volume of USD 56 billion between the two nations by 2030. It also addresses tariffs on British goods, including automobiles and whisky, which could further influence market sentiments in the coming months.

In the commodities market, the global oil benchmark Brent crude experienced a minor uptick, increasing by 0.32 per cent to USD 69.40 per barrel.

This downward trend in the Indian markets follows a fall on Thursday, 24 July, when the Sensex closed down by 542.47 points, or 0.66 per cent, finishing at 82,184.17. The Nifty index saw a decrease of 157.80 points or 0.63 per cent, concluding at 25,062.10. Investors will be closely monitoring these developments as they assess the future of the Indian equity market.