The Indian stock market had a bearish week from July 28 to August 1, 2025, marking its fifth straight week of losses the longest since August 2023. The downturn was driven by renewed US tariff threats, continuous selling by foreign investors, and disappointing Q1 corporate earnings. Although there were some positive signs like strong auto sales and a new UK trade deal, these were not enough to counter the overall negative sentiment. Selling pressure was widespread, hitting mid- and small-cap stocks harder than the main indices. Only a few defensive sectors showed resilience.
Table of contents:
- Key Market Indices Performance – Sensex & Nifty Weekly Wrap
- Sector-wise Performance
- Top Stock Market News – Domestic & Global Events
- FII and DII Activity – Weekly Institutional Flow
- IPO Market Update – Listings, Subscriptions, and New Issues
- Top Gainers and Losers – Weekly Movers
- Economic and Global Cues – Inflation, Crude, Global Risks
- What to Watch in the Coming Week – Key Events and Predictions
- Final Takeaway – Weekly Summary
The week ending August 1, 2025, proved challenging for Indian equities, with both the Sensex and Nifty recording notable declines.
Weekly Movement of Sensex and Nifty: On Friday, August 1, 2025:
- The BSE Sensex tumbled by 585.67 points (0.72%) to close at 80,599.91.
- The NSE Nifty 50 also slipped by 203.00 points (0.82%) to end the week at 24,565.35.
The week was marked by significant declines for Indian equities, with both the Sensex and Nifty experiencing their fifth consecutive week of losses, the longest such streak since August 2023.
- Overall Performance: The BSE Sensex fell by over 860 points for the week, while the NSE Nifty 50 dropped more than 270 points.
- Daily Breakdown:
- Monday, July 28: The week began with broad-based weakness and declining benchmarks due to widespread selling pressure.
- Tuesday, July 29, and Wednesday, July 30: The indices saw slight gains or approached resistance levels, but these movements lacked conviction and momentum.
- Thursday, July 31: Markets closed in the red again, with extensive selling.
- Friday, August 1: The week ended with a sharp fall, as the Sensex tumbled 585.67 points (0.72%) to close at 80,599.91 and the Nifty 50 slipped 203.00 points (0.82%) to end at 24,565.35.
Highlights of Gains or Losses:
- Underperformance: For the second consecutive week, the broader market indices—including the Nifty Midcap 100 and Nifty Smallcap 100—underperformed the main frontline index.
- Weekly Losses: Over the full week, the Nifty Midcap 150 index fell by nearly 2%, and the Nifty Smallcap 250 index dropped by 3%.
- Friday's Performance: On Friday, the Nifty Midcap index was down 1.37%, and the Nifty Smallcap index fell by 1.59%.
- Market Insight: This disproportionate decline in the mid-cap and small-cap segments indicates a broader lack of risk appetite among investors. During periods of uncertainty, investors tend to shift away from riskier, more volatile assets toward larger, more stable companies or defensive sectors. This widespread sell-off suggests that the market weakness is pervasive and not limited to just a few large companies, pointing to systemic concerns or a general negative outlook.
The week's market movements revealed a clear divergence in sectoral performance, reflecting a shift in investor preference amidst the overall bearish trend.
Top Weekly Gainers:
- Nifty FMCG: Gained almost 3%, the only sector to end the week in the green. This positive performance was led by strong contributions from companies like Varun Beverages and Hindustan Unilever (HUL). The resilience of the FMCG sector highlights its role as a defensive play during volatile periods.
Top Weekly Losers:
- Nifty Realty: Was the worst-performing sector, experiencing a 6% fall, with Godrej Properties and Brigade Enterprises seeing significant declines.
- Nifty Pharma: Recorded a substantial 3.3% decline on Friday, marking its third consecutive negative session and registering a weekly loss of 2.9%. This sector was particularly hit by US tariff fears on Indian goods and US drug pricing pressure, underscoring its acute vulnerability to international trade policies and regulatory changes.
- Nifty IT: Declined by 10% over the last 30 days.
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The Indian stock market's movements this week were significantly influenced by a combination of domestic corporate developments, particularly the ongoing earnings season, and various global economic and geopolitical factors.
Major Domestic News Events:
- Underwhelming Q1 FY26 Earnings Announcements: A flurry of Q1 (FY26) earnings announcements shaped market sentiment, with many showing muted results overall.
- IndusInd Bank reported a sharp 72% year-on-year decline in net profit.
- Kotak Mahindra Bank saw its net profit decline by 47.5% year-on-year.
- However, some companies reported strong results amidst the general weakness: Larsen & Toubro (L&T) posted a strong 30% year-on-year increase in net profit, and Bharat Electronics Ltd (BEL) experienced a net profit increase of 23-25%. This indicates that the market is becoming highly selective.
- Mixed Signals from the IT Sector: The IT sector presented a mixed outlook. While Infosys announced plans to hire 20,000 fresh graduates in 2025, Tata Consultancy Services (TCS) announced a 2% global workforce reduction, and HCL Technologies also flagged further "workforce restructuring." This contrasting news points to a significant restructuring or strategic divergence within the Indian IT sector.
- India-UK Free Trade Agreement (FTA): India signed a landmark free trade deal with the UK, aiming to double bilateral trade to $120 billion by 2030. This positive domestic development, however, was largely offset by global uncertainties.
- Strong Auto Sales: Despite the broader market decline, the auto sector reported strong sales figures. Maruti Suzuki's July total sales were up 3.1% year-on-year, including a notable 32.3% rise in exports.
- UPI Transactions Cross ₹25 Trillion in July 2025: Unified Payments Interface (UPI) transactions in July 2025 crossed ₹25 trillion, with volume rising 6%, indicating continued robust digital payment adoption.
Major Global News Events and Impact:
- US Tariffs on Indian Exports and Stalled Trade Talks: A primary driver of market weakness was the renewed global trade tensions. US President Donald Trump announced a 25% tariff on Indian goods, effective August 1, 2025. This was accompanied by a hint of additional penalties for India's purchase of Russian oil and arms. These moves triggered significant concerns across export-driven sectors like pharma and auto and severely dented investor sentiment.
- US Fed News and Global Geopolitical Factors: The Federal Open Market Committee (FOMC) meeting on July 29-30, 2025, maintained the federal funds rate at 4.25%–4.50%. A strong US dollar index, which rose 2.5% over the week and surpassed 100, intensified pressure on emerging markets like India by accelerating FII sell-offs. Asian markets, excluding Japan, saw significant losses.
The investment patterns of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) provided a significant narrative, highlighting a crucial dynamic between foreign capital outflows and robust domestic support.
The trends in Foreign Institutional Investor (FII) activity for the week ending August 1, 2025:
- Persistent Selling: FIIs were persistent net sellers in the Indian equity markets throughout the week. This extended their selling streak to five consecutive sessions and nine straight trading sessions overall.
- Significant Outflows: The total sell-off of Indian stocks by FIIs reached a substantial ₹27,000 crore. On Friday, August 1, 2025, they offloaded equities worth ₹3,366.40 crore.
- Record Bearish Positions: FIIs have established record bearish positions in the derivatives market. Their short positions in index futures reached 90%, the highest level since March 2023.
The Domestic Institutional Investor (DII) flows for the week ending August 1, 2025:
- Consistent Buying: In contrast to the FIIs, DIIs were consistent net buyers throughout the week, providing strong support to the market.
- Significant Inflows:
- On August 1, 2025, DIIs net purchased equities worth ₹3,186.90 crore.
- On July 31, they bought ₹6,372.70 crore.
- On July 29, they purchased ₹6,146.80 crore.
- On July 28, they bought ₹6,764.60 crore.
- Counterbalancing Role: DIIs acted as a crucial counterbalance by largely absorbing the selling pressure from FIIs, preventing a more severe market decline.
Their Impact on Market Sentiment: The unrelenting FII sell-off significantly weakened investor sentiment. However, the robust DII buying highlights a significant divergence in institutional confidence. While foreign investors are de-risking and taking bearish positions, domestic funds are actively accumulating, suggesting a belief in the long-term India growth story or a valuation play. This dynamic prevents a free fall and implies that domestic liquidity is robust enough to absorb significant foreign outflows, at least for now.
Despite the broader market weakness, the primary market remained active, with several IPOs seeing their allotment finalized during the week ending August 1, 2025. This resilience of the primary market amidst secondary market weakness suggests a decoupling of sentiment between the two market segments.
Key IPOs and Listings of the Week:
- Laxmi India Finance IPO: Allotment finalized on Friday, August 1, 2025. GMP stood at ₹1.5, indicating an estimated listing price of around ₹159.5, or an expected gain of about 0.95%. Subscribed 1.86 times overall by Day 3.
- Kaytex Fabrics IPO: Allotment expected on August 1, 2025. GMP was ₹40, implying a likely listing price of ₹220 per share (potential 22.22% gain). Subscribed 2.56 times overall by Day 2.
- Aditya Infotech IPO: Allotment expected on August 1, 2025. The GMP was approximately ₹290, suggesting a potential listing gain of about 42%. On its final day, the IPO received an overall subscription of 100.69 times.
- Repono IPO: Allotment finalized on Thursday, July 31, 2025. The GMP stood at ₹21, indicating a 22% listing premium. The IPO was subscribed 60.53 times overall.
The varying subscription rates and GMPs among IPOs indicate that investors are highly discerning, selectively backing companies with strong business models, growth prospects, and potentially attractive valuations.
Upcoming IPOs in the Next Week: The IPO market is set to remain busy in August 2025, offering new investment opportunities.
- JSW Cement IPO: Expected to open for subscription from August 7-11, 2025, aiming to raise ₹4,000 crore.
- Highway Infrastructure Ltd IPO: Scheduled to open from August 5-7, 2025, with an issue size of ₹130 crore.
- Flysbs Aviation IPO: Set to open from August 1-5, 2025.
- Other notable upcoming IPOs include Reliance Jio, Tata Capital, Zepto, Ather Energy, and PharmEasy.
Here's a summary of the top gainers and losers for the week ending August 1, 2025, along with their closing market prices on that day where available:
Top Gainers (Week Ending August 1, 2025):
- Suzlon Energy: The stock gained 7.1% to close at ₹65.95 per share. The rise was attributed to India's introduction of stringent norms requiring wind turbine makers to use locally sourced parts, along with a new 381 MW wind energy order.
- Indegene: Shares spiked 6.3% to close at ₹570 per share. This was driven by a strong Q1 performance, including a 33% rise in its net profit and a 13% year-on-year revenue climb.
- Netweb Technologies: The stock gained over 5% to close at ₹2139 per share. The increase followed the company's report that its Q1 net profit had doubled, thanks to robust demand for its artificial intelligence technologies.
- GE Vernova T&D India: The stock continued its winning run, hitting another 5% upper circuit limit to close at ₹2863.10 per share. This positive momentum was fueled by a strong Q1 FY26 performance.
Top Losers (Week Ending August 1, 2025):
- PNB Housing Finance: The stock plummeted 18%, making it the worst-performing stock among Nifty 500 constituents. This significant drop was triggered by the surprise resignation of its CEO, Girish Kousgi. The stock's closing price as of August 1, 2025 was ₹808.45.
- IIFL Finance: Shares tumbled 10.62%, marking their biggest intraday drop since March 2024. The previous sharp decline was caused by an RBI directive to cease gold loan disbursements. The closing market price on August 1, 2025 was ₹425.50.
- Kotak Mahindra Bank: The bank was a top loser on July 28, slumping 7.34% after reporting weak Q1 earnings on July 26, 2025. The closing market price on August 1, 2025 was ₹1995.90.
- Bajaj Finance: The stock fell 3.58% on July 28. Its closing market price as of August 1, 2025, was ₹877.
- IndusInd Bank: The stock declined 2.93% on July 28. The closing market price on August 1, 2025, was ₹783.95.
- Niva Bupa Health Insurance: Shares shed 7% after the company reported its June quarter earnings. The closing market price as of August 1, 2025, was ₹81.84.
- Reliance Power: Shares slid another 5% amid reports that the Enforcement Directorate (ED) summoned Reliance Group Chairman Anil Ambani for questioning. The closing market price as of August 1, 2025, was ₹50.09.
Beyond corporate earnings and institutional flows, broader economic and global factors played a crucial role in shaping the Indian stock market's performance.
RBI Decisions and Policy Outlook
- The Reserve Bank of India (RBI) is widely expected to maintain its key repo rate at 5.50% at its upcoming August 6th policy meeting. Economists suggest that while subdued inflation allows for rate cuts, India's strong economic growth of 7.4% in Q1 FY26 provides the central bank room to pause. The RBI Governor has indicated that future rate decisions will be based on the inflation outlook rather than just current readings. New UPI rules came into effect from August 1, 2025, including caps on daily balance requests and access limits on linked bank accounts.
Inflation Numbers
- India's retail inflation, measured by the Consumer Price Index (CPI), plummeted to a six-year low of 2.10% in June 2025, a significant drop from 2.82% in May. This was primarily attributed to positive base effects and a substantial 1.06% contraction in food inflation. However, price pressures remained persistent or slightly increased in other sectors like housing, education, health, and transport, indicating underlying cost pressures in core services.
Crude Oil Updates
- The energy price index rose by 9.7% in June, primarily driven by an 11.3% surge in crude oil prices. WTI crude oil for July '25 was trading around $74.93. However, crude oil and gasoline prices were sharply lower on Friday, August 1, reflecting immediate market reactions to global demand concerns.
US Fed News and Global Geopolitical Factors
- The Federal Open Market Committee (FOMC) meeting on July 29-30, 2025, maintained the federal funds rate at 4.25%–4.50%. A strong US dollar index, which rose 2.5% over the week and surpassed 100, intensified pressure on emerging markets like India by accelerating FII sell-offs. Asian markets, excluding Japan, saw significant losses, and China and Hong Kong stocks booked their steepest weekly losses since April due to soft data and Trump's tariffs.
The confluence of the RBI policy meeting, ongoing earnings announcements, and global economic data suggests that market volatility will persist, but opportunities for sectoral rotation may emerge. Investors will be highly data-dependent.
Upcoming Economic Data:
- The Reserve Bank of India's (RBI) Interest Rate Decision is scheduled for Wednesday, August 6, 2025.
- Global services and composite Purchasing Managers' Index (PMI) data, including India's own PMI, will be released on Tuesday, August 5.
- Other global data includes US Factory Orders (Monday, August 4), US ISM Services PMI (Tuesday, August 5), Germany Trade and Industrial Production (Thursday, August 7), and China CPI, PPI (Saturday, August 9).
Earnings Season Trends: The Q1 FY26 earnings season will continue to unfold, with several prominent companies slated to announce their results.
- Monday, August 4: Shree Cement, Bosch, Aurobindo Pharma.
- Tuesday, August 5: Bharti Airtel, Adani Ports, Britannia Industries, Lupin.
- Wednesday, August 6: Bajaj Auto, Divis Laboratories, Hero MotoCorp.
- Thursday, August 7: Titan Company, Hindustan Petroleum.
- Friday, August 8: State Bank of India, Oil & Natural Gas Corporation, Tata Motors, Grasim Industries, Bharat Petroleum.
Investor Expectations: Market participants will closely monitor official responses and further policy announcements from India and the US regarding trade tariffs. Investor sentiment remains weak, with the potential for the correction to extend. Banking and metal stocks, which underperformed last week, could continue to face resistance, while FMCG may offer some stability amid volatility. The market outlook for H2 2025 suggests three themes shaping market strategy: a weakening US dollar, Asia ex-Japan equities gaining momentum, and inflation risks.
- A Challenging Week for Indian Equities: The week ending August 1, 2025, saw the Indian stock market extend its losing streak to five consecutive weeks, marking the longest such period since August 2023.
- Global Headwinds Dominate:Renewed US tariff threats on Indian goods and stalled trade talks were major negative catalysts, overshadowing positive domestic news like the India-UK FTA and strong auto sales.
- Persistent FII Outflows, DIIs Provide Cushion: Foreign Institutional Investors continued their aggressive selling, offloading substantial amounts of equities and taking record bearish positions in derivatives. Domestic Institutional Investors, however, consistently absorbed this selling pressure, preventing a sharper market decline.
- Mixed Earnings and Sectoral Divergence: While overall Q1 FY26 corporate earnings were underwhelming, some companies like L&T and BEL reported strong results, indicating a selective market. The pharma sector faced significant pressure due to US drug pricing concerns, while FMCG emerged as a defensive play.
- Resilient IPO Market: Despite the secondary market weakness, the primary market remained robust, with several IPOs seeing strong oversubscription and positive Grey Market Premiums, reflecting investor appetite for specific growth stories.
- Outlook for the Coming Week: Volatility is expected to persist, driven by the upcoming RBI monetary policy decision and ongoing Q1 earnings announcements. Investors should closely monitor key technical levels and global cues.
We encourage all readers to stay informed and exercise caution in their investment decisions, as market volatility is likely to continue in the near term.