Stock Market Crash: Sensex Sheds Over 500 Points, Nifty Slips Below 25,500—5 Key Reasons Behind The Steep Fall

Indian equity markets witnessed a sharp sell-off on Thursday, July 24, with benchmark indices tumbling amid weak corporate earnings and subdued global sentiment. The Sensex dropped over 600 points during trade, or 0.82%, to close at 82,047.22, while the Nifty 50 slid 0.80% to end at 25,018.70—breaching the 25,500 mark.

Volatility also spiked, with India VIX rising over 2%, signalling a heightened investor nervousness. IT stocks dragged while the pharma and FMCG sectors also underperformed. PSU banks remained the lone bright spot in an otherwise weak market.

“Market sentiment remains cautiously optimistic amid heightened volatility and mixed global cues,” said Hardik Matalia, Derivative Analyst at Choice Broking. He added that investors may tread carefully ahead of key earnings announcements and ongoing global trade developments.

The corporate earnings season has been mixed so far, with 16 of the Nifty 50 companies having reported results. Of these, 3 have exceeded expectations, 5 have disappointed, and 8 have met analyst estimates. The uneven performance has added to the uncertainty, especially as investors await results from several large-cap firms later in the week.

Adding to market jitters is the delay in finalising the India-US trade agreement. The much-anticipated deal, which was expected to be concluded during Prime Minister Modi’s UK visit, now appears to be stuck in negotiations, fuelling concern about near-term trade and investment flows.

The market downturn was led primarily by IT stocks, which came under intense pressure following lacklustre earnings and negative cues from the US. Major IT names including Infosys, Tech Mahindra, HCLTech and TCS fell sharply through the session, dragging the broader indices lower.

Global cues have not helped sentiment either. Wall Street closed lower overnight as concerns over persistent inflation and hawkish commentary from the US Federal Reserve weighed on investor morale. The dollar’s continued strength and sustained foreign institutional outflows have also added pressure on Indian equities.

Elsewhere in Asia, equities extended their winning streak for the sixth consecutive session, buoyed by expectations of further trade pacts involving the US, following the recent agreement with Japan. However, that optimism has yet to translate into gains for Indian markets, which remain weighed down by domestic concerns and external headwinds.

The Nifty slipped lower as it faced stiff resistance around the 25,250–25,260 zone. On the hourly chart, the index fell back below the 50-EMA and closed below it. According to Rupak De, Senior Technical Analyst at LKP Securities, overall, the index continues its range-bound movement, which may persist in the near term.

"On the downside, support remains intact at 24,900; a decisive break below this level could trigger a correction in the market. On the other hand, a sustained move above 25,260 may induce a fresh rally," added De.

Disclaimer: The views and opinions expressed by investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.