Markets in meltdown mode: Sensex falls 1,836 pts in three sessions, investors lose ₹13.5 lakh cr

Indian equity markets continued their downward spiral for the third straight session on Monday, with the BSE benchmark Sensex plunging a total of 1,836 points, amid growing anxiety over the looming tariff deadline in global trade negotiations. This was largely due to a combination of geopolitical uncertainty, foreign fund outflows, and mixed corporate earnings.

The sharp sell-off led to a massive erosion of ₹13.5 lakh crore in investor wealth, indicating heightened volatility and broad-based weakness across sectors. The total market capitalisation of BSE-listed companies declined to ₹447.87 lakh crore from ₹461.43 lakh crore at the end of trade on July 23, 2025.

“Markets are currently grappling with headwinds on both domestic and global fronts. On the domestic side, earnings disappointments and persistent foreign fund outflows are dampening sentiment,” said Ajit Mishra – SVP, Research, Religare Broking.

Continuing its losing streak for the third consecutive session, the BSE Sensex closed 572 points, or 0.7%, near day's low of 80,891, and the NSE Nifty50 plunged 156 points to settle at 24,680.90 level. Most sectors closed in negative terrain, with realty, metal, and banking emerging as the top losers. The broader indices also continued their consolidation, falling between 0.90% and 1.33%.

On the BSE Sensex pack, 24 out of 30 stocks ended in negative terrain, led by Kotak Mahindra Bank , Bajaj Finance , Bharti Airtel , Titan , and TCS . The six gainers on the Sensex were HUL, Asian Paints, ICICI Bank, Power Grid, ITC, and HDFC Bank.

One key development to note is the continued rise in India VIX, the volatility index, which climbed for the third consecutive session. From its recent low of 10.72, it has jumped nearly 12.5% in just three trading days, signalling a growing nervousness among market participants and a possible increase in short-term market volatility, said Sudeep Shah, Head - Technical and Derivatives Research, SBI Securities.

Vinod Nair, Head of Research, Geojit Investments, said the domestic market sentiment has remained cautious, weighed down by a disappointing set of Q1 earnings, delays in the India-U.S. trade agreement, and continued FII outflows.

“In contrast, global markets remain broadly positive, supported by U.S.-EU trade developments that are perceived as less concerning than anticipated. The upcoming monetary policy decisions from the Fed and BoJ, along with the trajectory of domestic quarterly earnings, are expected to play a pivotal role in shaping market direction in the near term," he said.

Notably, foreign institutional investors (FIIs) pulled out ₹13,552 crore from Indian equities last week. In comparison, domestic institutional investors (DIIs) offered strong counterbalance, pumping in ₹17,932 crore and helping cushion the fall in equities.

FIIs remained net sellers throughout the week, with the largest single-day outflow of ₹4,209 crore on July 23, followed by ₹3,549 crore on July 22. Meanwhile, DIIs ramped up their purchases steadily, peaking at a net inflow of ₹5,240 crore on July 22.

On a month-to-date basis, FIIs have sold ₹30,509 crore worth of equities, while DIIs have infused ₹39,826 crore, underlining strong domestic conviction amid global volatility.

Technical outlook

Technically, a bearish candle on daily charts and a lower top formation on intraday charts indicate further weakness from the current levels, said Shrikant Chouhan, Head Equity Research, Kotak Securities.

According to Chouhan, as long as Nifty stays below 24,800 and Sensex below 81,100, the short-term bias remains weak. The next support levels are seen at 24,550–24,500 for the Nifty and 80,500–80,350 for the Sensex. Any rebound above 24,800/81,100 could lead to a recovery toward 25,000/81,700.

Ajit Mishra of Religare Broking added that the 24,450–24,550 zone is a critical support for the Nifty, with 24,900–25,000 likely to act as a resistance band. He advised traders to stay cautious and align their positions with prevailing market trends.

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