Indian equities kicked off the final week of July on a weak note, with benchmark indices closing in the red on July 28 amid sustained foreign outflows, weak global cues, and sluggish earnings.
At close, the Sensex tumbled over 572 points or 0.7% to settle around 80,891, while the Nifty 50 slid by nearly 156 points or 0.6% to end below the 24,700 mark. The broader market too wore a weak look, with mid- and small-cap indices falling around 1% lower.
One of the biggest drags in today’s session was Kotak Mahindra Bank, which slumped nearly 7% following a disappointing earnings show for the June quarter. The private lender reported a consolidated net profit of ₹4,472 crore, a fall from ₹7,448 crore in the same quarter last year, although that year-ago figure was ballooned by a Rs 3,000-crore one-time gain from a stake sale.
However, what rattled investors more than the headline numbers was the management’s cautious tone. Rising stress in the bank’s retail commercial vehicle loan book, as flagged by the management, sent jitters amongst investors and sparked fresh concerns about asset quality within the sector.
The sell-off in Kotak Mahindra spilled over to the broader banking space. The Nifty Bank index slipped 0.4%, with most major components like Axis Bank, ICICI Bank, and HDFC Bank trading lower.
Analysts also said that the pressure was compounded by the relentless selling by foreign institutional investors. According to VK Vijayakumar of Geojit Financial Services, FIIs dumped a staggering ₹13,552 crore worth of equities in the cash segment just last week, and the trend appears far from easing. In fact, July has seen consistent foreign outflows, as FIIs reversed the three-month buying streak that had supported the market rally in the first half of 2025.
The pain wasn’t limited to banks, however. IT stocks also bleed, dragging the Nifty IT index deeper into the red. Shares of TCS, HCL Tech, Tech Mahindra, and Wipro all lost ground. The sector has been under pressure since TCS announced a workforce reduction of around 2% over FY26, which flagged fears over layoffs amid faltering demand and rising use of AI. With Q1 earnings from the IT pack mostly underwhelming and the outlook muted, the sector also turned into a hotspot for FII selling.
Meanwhile, global cues offered little cheer as most Asian peers also inched lower. The India VIX, the barometer of market volatility, spiked nearly 7% to 12.07, hinting at growing risk aversion among traders.
From a technical perspective, analysts warn that the current correction may not be over. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that the Nifty has breached its crucial 50-day simple moving average and formed a bearish pattern on both daily and weekly charts. Unless the index decisively moves back above the 25,000 level, the selling pressure could drag it further toward the 24,700–24,750 range, Chouhan said.
Mandar Bhojane of Choice Broking also alarmed caution, adding that traders should avoid aggressive long positions at current levels. “It’s better to book partial profits during intraday bounces and use strict stop-losses to protect capital,” he noted.
As the month draws to a close, July looks set to end on a sombre note for the Indian equity market. A mix of domestic earnings disappointment, foreign fund outflows, global weakness, and sector-specific drags have taken the shine off what is usually a seasonally positive month for the market.
