Top 5 triggers behind Sensex’s 1,459 point fall in just 4 days!
Sensex falls over 1,400 points in 4 days as trade tensions, FPI outflows, and valuation worries rattle Indian markets. Nifty 50 slips below 25,100.
The Indian stock market has faced a sharp four-day decline, with the Sensex tumbling 1,459 points (1.74%) to close at 82,253.46 on July 14. The Nifty 50 followed suit, shedding 1.72% to settle at 25,082.30—dropping below the critical 25,100 mark.
In contrast, BSE Midcap and Smallcap indices defied the trend, rising 0.67% and 0.57%, respectively, on Monday.
So, why is the market falling? Here are five major reasons:
1. Trade War Tensions
Global sentiment took a hit after U.S. President Donald Trump ramped up tariffs—35% on Canadian imports and 30% on goods from Mexico and the EU, effective August 1. While there's talk of a US-India interim trade deal with tariffs under 20%, uncertainty around it is creating nervousness in the market.
"Any delay or disappointment in a US-India deal could further dampen market sentiment," says VK Vijayakumar, Chief Investment Strategist, Geojit Financial.
2. Shift Toward Mid and Small-Caps
Retail investors are gravitating toward mid- and small-cap stocks, eyeing faster growth and better valuations. With over 22 crore registered investors in India and six lakh new entrants weekly, this segment has become the new hotspot.
“The broader markets could continue to outperform in the near term,” notes G. Chokkalingam of Equinomics Research.
3. FPI Selling Pressure
After four months of consistent inflows, foreign investors have turned net sellers, offloading over ₹10,000 crore worth of equities in July (till the 11th). Since FPIs hold large positions in blue-chip stocks, this has directly impacted the benchmarks.
4. High Valuation Concerns
The Nifty 50’s PE ratio is currently 22.6—above its 1-year average of 22.2. With Q1 earnings expected to be mixed and stronger growth projected only by Q3 FY26, investors are wary of stretched valuations.
5. Technical Weakness
Experts point to key resistance and support levels being breached. Kotak Securities’ Shrikant Chouhan believes the markets may slide further toward 81,200 unless the Sensex crosses 83,200 and Nifty breaches 25,350 convincingly.
LKP Securities’ Rupak De warns that a drop below the 24,900 level on the Nifty could signal a deeper correction phase.
📉 In Summary:
A combination of global trade concerns, shifting investor focus, FPI exits, overvalued benchmarks, and technical signals are driving the market down. While mid- and small-caps are holding firm for now, the broader trend suggests caution ahead unless key support levels hold.
