July’s steep selloff becomes the worst since 2019; IT and realty stocks lead the decline as weak earnings and US-India trade uncertainty weigh on investor sentiment
Mumbai | Economy India : Indian equity markets continued their downward spiral for a third consecutive session on Monday, with the Sensex plunging 572 points to close at 80,891, and the Nifty slipping 156 points to 24,681. Over the last three trading days—Thursday, Friday, and Monday—the Sensex has lost 1,836 points, or nearly 2.2%, making this July’s worst fall since 2019.
The massive correction has wiped off nearly Rs13.5 lakh crore from the market capitalization of BSE-listed companies, which now stands at Rs447.87 lakh crore.
Weak Q1 Earnings and Global Uncertainty Rattle Investors
Market analysts attribute the sell-off to weaker-than-expected Q1 earnings for FY26. While Bloomberg had projected flat earnings per share (EPS) growth, actual results came in softer than anticipated.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, warned, “As long as the Nifty trades below 24,800 and Sensex below 81,100, weakness may persist. In the absence of any positive triggers, Sensex could fall further to 80,350.”
Sectoral Bloodbath: IT and Tech Stocks Lead Decline
Of the 21 BSE sectoral indices, only healthcare ended in the green, while IT, tech, and realty bore the brunt of the sell-off.
Top Sectoral Losers (1–28 July 2025):
| Sector | % Drop |
|---|---|
| Tech | ▼8.6% |
| IT | ▼7.1% |
| Realty | ▼7.5% |
| Telecom | ▼5.9% |
| Industrials | ▼2.7% |
On the other hand, healthcare, FMCG, and consumer durables saw marginal gains, offering some relief to investors.
Top Sectoral Gainers:
| Sector | Change |
|---|---|
| Healthcare | ▲2.4% |
| FMCG | ▲0.7% |
| Consumer Durables | ▲1.0% |
Valuation Caution: Nifty Trading Above PE Average
Analysts at InCred Equities caution that the forward PE multiple of Nifty-50 has crossed its long-term average, signaling possible market consolidation. “The current valuation levels suggest the market could remain sideways for a while,” they said.
India-US Tariff Delay Fuels IT Stock Selloff
According to G. Chokkalingam, MD at Equinomics, delay in a trade deal between India and the US is a key overhang. “The biggest worry is that the US may impose retaliatory tariffs on Indian goods and services. This fear has hit IT stocks hard,” he said.
He added, “Until a balanced agreement is reached between the two countries, markets may continue to remain under pressure. A breakthrough could trigger a reversal.”
Market Volatility Rises, Fear Index Surges
Sudeep Shah, Head of Technical Research at SBI Securities, noted that market anxiety is on the rise. India VIX—often referred to as the fear index—jumped 12.5% in just three sessions, moving from 10.72 to higher levels, indicating growing nervousness among traders.
He expects increased volatility ahead, although defensive sectors like pharma, FMCG, and healthcare may remain resilient, particularly after India’s recent trade deal with the UK.
LIC Loses Rs46,000 Crore in Equity Value
The steep fall in equities has also impacted India’s largest institutional investor, LIC. The value of its equity holdings dropped by Rs46,000 crore in July, falling from Rs16.10 lakh crore on June 30 to Rs15.64 lakh crore by July 25.
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(Economy India)
