Domestic Markets Extend Losing Streak Amid Weak Q1 Earnings; Nifty Falls Below 25,000

Indian equity markets extended their third consecutive week of correction, closing below the key 25,000 mark on the Nifty index, as weak earnings from IT and financial companies weighed on investor sentiment.

Analysts attribute the downturn to a muted Q1FY26 earnings season, compounded by global uncertainties and subdued outlooks across core sectors.

IT and Financial Stocks Drag Markets Down

IT stocks led the slide, under pressure from cautious guidance and sluggish global demand.

Financial stocks also struggled amid expectations of net interest margin (NIM) contraction and asset quality concerns, further souring investor mood.

“FMCG stocks, however, bucked the trend, supported by optimistic growth guidance and signs of urban consumption revival,” said Vinod Nair, Head of Research at Geojit Financial Services. “Improved macroeconomic trends could shift investor focus toward consumption-oriented sectors.”

Indices Close Lower on Friday

On Friday, both major indices closed in the red.

The Sensex fell 501.51 points (0.61%) to 81,757.73, while the Nifty declined 143.05 points (0.57%) to end at 24,968.40.

All major sectoral indices, except Media and Metal, ended lower.

Sectors like Pharma, Private Banks, PSU Banks, FMCG, Capital Goods, Consumer Durables, and Telecom recorded losses ranging from 0.5% to 1%.

The broader markets also corrected, with the Nifty Midcap and Smallcap indices dropping 0.7% and 0.8%, respectively.

Key Data Points and Trade Talks Ahead

According to Bajaj Broking Research, the upcoming week will be data-heavy, with high-frequency economic indicators from India and the US likely to influence market direction.

Key among them is India’s S&P Global Manufacturing PMI (Preliminary) for July, which investors hope will reflect continued momentum in manufacturing activity.

Globally, attention remains on the proposed US-India mini trade agreement.

Analysts believe a favourable outcome could improve prospects for export-driven sectors and enhance India’s positioning among emerging markets.

Also Read: Reliance Industries Reports 78% Jump In Q1 Profit, Hits Record EBITDA And Subscribers