The Sensex and Nifty 50 extended their losing streak to a sixth consecutive week on Friday amid persistent selling pressure triggered by global trade tensions, muted corporate earnings, and sustained foreign capital outflows.
The Sensex closed 788 points, or 0.98 percent, lower at 79,835.61, while the Nifty 50 fell 233 points, or 0.95 percent, to settle at 24,363.30 — marking the sixth straight week of declines.
Broader markets fared even worse, with the BSE Midcap index falling 1.56 percent and the Smallcap index losing 1.03 percent.
The benchmark indices have been under pressure since late June. After registering a 3 percent gain in June, the Nifty 50 fell by 3 percent in July and is already down over 1 percent in August.
Market analysts point to five major factors behind the persistent weakness:
1. Market unable to price in Trump’s tariff unpredictability:
Although consensus suggests that US President Donald Trump’s 50 percent tariff on Indian imports will mainly affect export-oriented sectors such as textiles and gems and jewellery, the market is struggling to discount the broader uncertainty triggered by his actions.
Trump recently dashed hopes that the new tariffs would be reduced through negotiations, stating that talks with India will remain suspended until the ongoing dispute is resolved.
2. Growth narrative under threat?
Investor sentiment has also been hit by fears that Trump’s aggressive stance may damage India’s long-term growth story.
A retaliatory response by India could further diminish chances of a favourable trade agreement with the world’s largest economy and biggest consumer market.
Currently, India’s 50 percent tariff is significantly higher than those of key export competitors — 20 percent for Bangladesh, 30 percent for China, and 20–30 percent for Vietnam.
Some analysts warn that the new tariff regime could cut India’s exports to the US by as much as 60 percent and reduce GDP growth by around 1 percent, according to Bloomberg Economics.
JM Financial noted that at current tariff levels, Indian exports to the US are largely unviable, putting India at a relative disadvantage compared to its Asian peers and placing strain on India-US relations.
3. Tepid earnings drag down sentiment
India Inc.’s Q1 earnings have largely failed to impress the markets. While hopes were pinned on a recovery in the second half of FY26, the added pressure from the tariff situation is dampening expectations.
"The market continues to be technically and fundamentally weak," said VK Vijayakumar of Geojit Financial Services. "There are no firm signs of a strong earnings rebound in FY26, and technically, the Nifty making continuous lower lows is a negative signal."
4. Relentless foreign investor selling
Foreign portfolio investors (FPIs) have been pulling out funds aggressively. In July, FPIs offloaded Indian equities worth ₹47,667 crore. In the first eight days of August alone, they have sold stocks worth over ₹15,950 crore.
"The weak market trend, combined with relatively expensive valuations, is fuelling sustained FPI selling," said Vijayakumar. "So far, FPIs have sold on every trading day in August."
However, strong buying by domestic institutional investors (DIIs), backed by continued mutual fund inflows, is providing some cushion and may help prevent a sharp market crash.
5. Key technical support breached
From a technical standpoint, the Nifty 50 has breached the critical 24,500 support level, indicating further downside could be in store.
Axis Securities noted that a move above 24,525 could lead to a rally towards 24,706–24,996. Conversely, if the index remains below 24,525, it may fall further to test support zones near 24,415, 24,235, and 24,125.
With no immediate resolution in sight for the trade tensions and earnings outlook still uncertain, analysts caution that volatility may persist in the near term. The market’s ability to stabilise could hinge on how global cues, foreign fund flows, and domestic economic indicators evolve in the coming weeks.
(By arrangement with livemint.com)
