Why stock market is down today? Sensex plunges over 700 pts, Nifty slips below 24,850; 5 reasons behind the fall

Indian equity benchmarks tumbled on Friday, with the Sensex plunging over 700 points intra-day and the Nifty50 slipping below the 24,850 mark. The sell-off was led by financial stocks, particularly Bajaj Finance, amid broader concerns around global cues and foreign investor activity.

As of 12:28 pm, the BSE Sensex was down 720 points, or 0.88%, at 81,464., while the Nifty50 fell 241 points, or 0.96%, to 24,821.

The total market capitalisation of BSE-listed companies dropped by Rs 4.75 lakh crore to Rs 453.35 lakh crore.

Here are five key reasons behind today’s market slide:

1. Financial stocks under pressure after Bajaj Finance results

The biggest drag came from the financial sector, with the Nifty Financial Services index falling over 1%. Bajaj Finance and Bajaj Finserv led the losses, declining 5.5% and 4.5%, respectively, following concerns over asset quality in the MSME segment despite posting strong quarterly results.

Axis Bank, HDFC Bank, and Kotak Bank also lost ground, shedding up to 1%. Bajaj Finance was the top Nifty laggard.

2. Uncertainty over US-India trade deal

Investor sentiment is also weighed down by uncertainty surrounding a possible interim trade deal between India and the U.S. With Washington’s August 1 deadline approaching, negotiations remain stalled over tariffs on agricultural and dairy products.
A breakthrough appears unlikely in the near term, as India’s trade delegation returned from Washington without any resolution. The absence of a formal tariff communication from the U.S. adds to the uncertainty.

3. Continued FII selling

Foreign institutional investors (FIIs) have been net sellers in recent sessions, offloading Rs 11,572 crore worth of Indian equities in the last four trading days alone.

“The near-term market construct has turned weak. Sustained FII selling and the correction in broader markets—especially smallcaps where valuations had turned excessive—will likely keep pressure on the indices,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

4. India-UK Trade Pact

India and the UK signed a long-anticipated Free Trade Agreement (FTA) on Thursday during Prime Minister Narendra Modi’s visit to London. While the deal is expected to benefit sectors like textiles, whisky, and automobiles by reducing tariffs, analysts believe the agreement is unlikely to offer immediate market upside without clarity on trade negotiations with the US

5. Weak global cues

Asian markets traded lower on Friday as investors booked profits ahead of a crucial week. Japan’s Nikkei fell 0.5% from record highs, while Hong Kong’s Hang Seng dropped 0.5%, and Australia’s ASX 200 declined 0.5%. Mainland Chinese indices also slipped.

Although US futures were slightly higher after strong earnings from Alphabet, the week ahead includes key risk events like the Federal Reserve policy meeting, U.S. payrolls data, and earnings from major tech firms including Apple, Amazon, Meta, and Microsoft.

Broader Market Impact

The Nifty Auto index fell 1.3%, leading sectoral declines, followed by financial services, metal, PSU Bank, IT, and Oil & Gas, all down between 0.7% and 1.3%. Broader indices underperformed, with the Nifty Midcap100 and Smallcap100 falling 1.2% and 1.5%, respectively.