Indian stock markets closed sharply lower on Friday, August 1, as widespread selling marked the start of the August derivatives series. Investor sentiment was weighed down by concerns over tariffs, disappointing earnings, and continued foreign fund outflows.
The Sensex declined by 586 points, or 0.72 per cent , to close at 80,599.91, while the Nifty 50 dropped 203 points, or 0.82 per cent, ending the session at 24,565.35.
Broader market indices saw steeper declines, with the BSE Midcap index slipping 1.37 per cent and the Small-cap index falling by 1.59 per cent.
“Domestic equity market navigated a volatile week marked by heightened uncertainty surrounding trade negotiations and subdued earnings. The market oscillated between cautious optimism and defensive positioning, ultimately ending lower due to a persistent FII outflow. With global headwinds, investors showed a preference for domestically driven stories with non-discretionary appeal, as broader sentiment turned selective. FMCG stocks stood out, benefiting from attractive valuations and insulation from external shocks, particularly amid escalating tariff threats. Globally, markets remained under pressure due to rising US inflation and hawkish signals from the Fed and BoJ, dampening hopes of immediate easing of interest rates, which weighed heavily on emerging markets.
Going forward, investors will closely monitor the upcoming RBI rate decision next week, while the risks remain tilted to the downside. A stable inflation outlook, potential progress in trade talks, and selective strength in domestic sectors are anticipated to lay the groundwork for a recovery,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Indian stock market trends
Equity benchmark indices declined for the fifth straight week amid ongoing selling pressure, global uncertainties, and a cautious market mood. Both the Nifty and Sensex experienced significant volatility before ending the week with steep losses at 24,512.20 and 80,218.52, respectively.
On the Nifty outlook next week, Rupak De, Senior Technical Analyst at LKP Securities, said, “Nifty witnessed another sharp decline as it failed to reclaim the 200-DMA on the hourly chart, despite a strong recovery on Thursday. Throughout the day, the index remained below the 50-EMA on the hourly timeframe. On the daily chart, it has broken below the recent consolidation support at 24,600. Sentiment remains weak, with the potential for the correction to extend towards 24,400–24,450. A further decline is likely if it slips below 24,400; otherwise, a recovery can be expected. On the higher side, resistance is seen at 24,600–24,650 and 24,850.”
Meanwhile, on the Bank Nifty outlook, Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, said, “ The Bank Nifty continues to show signs of weakness, with the zone of 55,550 to 55,150 acting as a crucial support area. A breakdown below 55,150 could accelerate the selling pressure and drag the index lower towards the next key support at 54,500. On the upside, Resistance on bounce backs is seen at 56000 and 56500.”
Here are the key triggers for stock markets in the coming week:
RBI MPC meeting
The Reserve Bank of India (RBI) monetary policy committee (MPC) meeting has been rescheduled to August 4 to August 6 from previously announced schedule of August 5–7, 2025.
“ At the domestic level, all eyes will be on the Reserve Bank of India’s monetary policy meeting on August 6, where the central bank’s commentary on inflation, liquidity, and growth outlook will be keenly watched,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
India-US trade deal
With the India-US trade agreement still pending, the United States has implemented a 25% reciprocal tariff on Indian goods effective August 1, 2025. In addition, India could face further penalties due to its trade relations with Russia.
As a result, the tariff advantage India enjoyed under the April announcements has now reversed. India is now subject to higher tariffs compared to several Asian counterparts — Vietnam at 20%, Indonesia at 19%, and South Korea at 15%.
In response, the Indian government is contemplating imposing a digital tax on American tech giants such as Microsoft, Google, Meta, and Amazon. Despite this, both nations — particularly U.S. President Donald Trump — remain dedicated to pursuing discussions aimed at a potential India-U.S. trade agreement.
Q1 earnings
More than 900 companies have reported their financial results for the quarter ending on June 30, 2025. However, the earnings season is yet to be over as several marquee companies like Bharti Airtel, DLF, Bajaj Auto, Hero MotoCorp, Tata Motors, SBI, LIC etc. will be declaring their results in the upcoming week.
IPO Activity
The IPO buzz in the primary market is all set to continue in August 2025 also as 10 new public issues – 2 in mainboard and 8 in SME segment – are all set to open for subscription in the coming week.
Apart from new IPOs, the market will also witness listing of 12 IPOs in the upcoming week.
FII Activity
Amid the combined impact of three major setbacks — a disappointing Q1 earnings season, the imposition of a harsh 25% tariff on Indian goods by Donald Trump, and the surge of a strong US dollar — foreign institutional investors (FIIs) have been aggressively offloading Indian stocks for nine consecutive trading sessions, with total outflows reaching a massive ₹27,000 crore.
Crude Oil prices
Oil prices fell by around $2 per barrel on Friday due to concerns over a potential production hike by OPEC and its allies, coupled with a disappointing U.S. jobs report that raised fears about weakening demand.
Brent crude futures closed at $69.67 per barrel, dropping $2.03 or 2.83 per cent, while U.S. West Texas Intermediate (WTI) crude ended the session at $67.33 per barrel, down $1.93 or 2.79 per cent.
Gold Prices
Gold prices climbed nearly 2% on Friday, reaching a one-week high, as softer-than-expected U.S. payroll data strengthened expectations of a Federal Reserve rate cut, while new tariff announcements increased demand for safe-haven assets.
Spot gold rose by 1.8% to $3,347.66 per ounce as of 1:48 p.m. ET (17:48 GMT), after briefly gaining as much as 2% earlier in the day. For the week, bullion posted a 0.4% increase.
Technical View
According to Ajit Mishra – SVP, Research, Religare Broking Ltd, the Nifty’s close below the 24,600 mark confirms a bearish bias, with the short-term structure suggesting scope for further downside unless a strong rebound materializes.
“ The index now finds immediate support near the 24,450 zone, and a breach below this level may accelerate the decline toward 24,180, which coincides with the long-term 200-day exponential moving average (DEMA). In the event of a recovery, the 24,800 level would act as the first resistance, followed by a significant hurdle around the 25,000–25,250 zone,” Mishra said.
On the Bank Nifty outlook, Mishra further said that the index is also gradually trending lower despite visible strength in heavyweight constituents like ICICI Bank and HDFC Bank.
“ Going forward, the 54,500–55,100 zone is likely to provide support in case of further declines, while the 56,500 mark, aligned with the 20-day EMA, will act as the first major resistance. Only a decisive move above 57,400 can revive bullish sentiment in the banking space,” Mishra added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
