SENSEX down 645 pts, NIFTY50 below 24,900: FII outflows, subdued earnings among top factors behind the market fall

After opening with losses, the Indian stock market continues to remain under pressure on Friday, July 25. The market breadth was seen in favour of declines, with 2,170 stocks falling out of 2,865 traded.

At 12:05 PM, the S&P BSE SENSEX was trading 644.79 points, or 0.78% lower, at the 81,539.38 level. The NSE’s NIFTY50 was trading at the 24,846.80 level, tumbling 215.30 points, or 0.86%.

Here are the key factors behind the stock market fall on Friday

The foreign institutional investors (FIIs) continued with their selling momentum in the Indian equity market, leading to nervousness among investors.

On Thursday, the foreign institutional investors (FIIs) sold shares worth ₹2,133.69 crore on a net basis, according to exchange data. In the last four trading sessions, FIIs have sold ₹11,572 crore worth of shares.

Globally, all the indices in the Asian market remained subdued on Friday as investors locked in profits ahead of US President Donald Trump's tariff deadline and a host of central bank meetings.

Last seen, Japan's Nikkei was down 0.87%, while Hong Kong's Hang Seng tumbled 1.07%. South Korea's KOSPI slipped 0.04%, and the Shanghai Composite was also trading 0.32% lower.

Investors remained cautious as US Treasury Secretary Scott Bessent will meet with Chinese officials in Stockholm, Sweden, next week to work toward a deal with Beijing ahead of a tariff truce that expires on August 12.

Meanwhile, Trump has said a China trip “is not too distant” as trade tensions ease.

Shares of Bajaj Finance were the main laggard on the 50-share index despite the NBFC reporting a 20% increase in net profit for the June quarter at ₹4,700 crore as compared to ₹3,912 crore in the same period last year.

Shares of Bajaj Finance slipped as much as 6.35% to hit an intraday low of ₹898 apiece on the NSE on Friday. Last seen, the stock was down 5.14%.

The company's asset quality deteriorated, which could be attributed to the sharp fall in the stock. Bajaj Finance, in its press release on Thursday, said that the gross NPA and net NPA as of June 30, 2025, stood at 1.03% and 0.50%, respectively, as against 0.86% and 0.38% as of June 30, 2024.

Shares of Bajaj Finserv were also trading 4.61% lower at ₹2,032.3 on NSE ahead of its earnings announcement.

Meanwhile, shares of Bajaj Auto dropped over 2.5% on Friday after its Managing Director, Rajiv Bajaj, said that the company could see its electric vehicle (EV) production drop to zero in August due to China's restrictions on rare earth magnet exports.

The investors sentiment was also battered following earnings disappointments. June quarter earnings of FMCG firm Nestle India were below expectations.

The country's leading FMCG company, which makes the popular noodle brand Maggi, reported a net profit of ₹647 crore in the first quarter of the current financial year, marking a decline of 13% from ₹746 crore in the same period last year.

The decline in profit came on the back of elevated consumption prices across the commodity portfolio, the company said in a regulatory filing. The quarter was impacted by elevated consumption prices across the commodity portfolio. 

Another FMCG major, Colgate Palmolive (India), also reported a challenging quarter and posted a 12% decline in its net profit at ₹321 crore for Q1 FY26. Colgate’s revenue from operations for Q1 FY26 came in at ₹1,421 crore as compared to ₹1,486 crore year-on-year (YoY), clocking a dip of 4.3%.

However, Infosys, Coforge, and Persistent Systems reported decent numbers for the June quarter this week.

The broader market also witnessed selling pressure on Friday, with both the Nifty Midcap 100 and Nifty Smallcap 100 gauges losing 1.37% and 1.86%, respectively.

APL Apollo Tubes (-5.31%), Aditya Birla Capital (-4.87%), SAIL (-4.08%), L&T Finance (-4.08%), and Bandhan Bank (-3.51%) were the top draggers on the Nifty Midcap 100 index.

On the Nifty Smallcap 100 index, Kfin Technologies (-6.6%), Poonawalla Fincorp (-5.71%), Reliance Power (-5%), Swan Energy (-4.77%), and Five-Star Business Finance (-4.47%) were the biggest losers.

The rupee depreciated 19 paise to 86.59 against the US dollar in early trade on Friday; a negative trend in domestic equities and foreign fund outflows dented investors' sentiments.

At the interbank foreign exchange, the domestic unit opened at 86.59 against the greenback, registering a decline of 19 paise from its previous closing level.

On Thursday, the rupee pared initial gains to settle just 1 paisa higher at 86.40 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.23% to 97.60.