The markets closed sharply lower on Friday, with the Sensex tumbling 689.81 points or 0.83 per cent to 82,500.47 and the Nifty 50 declining 205.40 points or 0.81 per cent to 25,149.85, as disappointing earnings from IT major Tata Consultancy Services (TCS) and mounting concerns over US tariff policies dampened investor sentiment.
The session began on a negative note following TCS’s underwhelming quarterly results, which showed a quarter-on-quarter revenue decline, driven largely by the BSNL ramp-down and weakness in international business. The IT bellwether’s cautious commentary about global demand conditions triggered heavy selling across the technology sector, with the Nifty IT index plunging 1.8 per cent to emerge as the worst performer.
“The domestic market experienced a negative close due to a sober start to the Q1 earnings season and a ramp-up in the tariff threat by the US, which had imposed a 35 per cent tariff on Canada,” said Vinod Nair, Head of Research at Geojit Investments Ltd. “The IT index underperformed due to deferment in orders and new investments, which may impact FY26 earnings estimates.”
The sectoral performance was broadly negative, with auto stocks bearing the brunt of the selling pressure. The Nifty Auto index retreated 1.7 per cent, with major losers including Mahindra & Mahindra, which declined 2.92 per cent to ₹3,069.90, Hero MotoCorp falling 2.74 per cent to ₹4,203.00, and Bajaj Auto dropping 2.54 per cent to ₹8,074.50. Media stocks also faced significant pressure, with the Nifty Media index declining 1.6 per cent.
However, the defensive sectors provided some respite to the broader market decline. The Nifty Pharma index outperformed with gains of 0.7 per cent, while the Nifty FMCG index closed with gains of 0.5 per cent. Leading the gainers on the Nifty 50 was Hindustan Unilever, which surged 4.63 per cent to ₹2,520.00, followed by SBI Life Insurance gaining 1.37 per cent to ₹1,835.00, and Sun Pharma rising 0.71 per cent to ₹1,674.30.
Banking stocks showed resilience despite the broader market weakness, with IndusInd Bank gaining 0.64 per cent to 858.30 and Axis Bank advancing 0.63 per cent to 1,171.60. The Nifty Bank index declined a modest 0.35 per cent to 56,754.70, while the Nifty Financial Services index fell 0.49 per cent to 26,853.10.
“Markets traded under pressure on Friday and lost over half a per cent, dragged down by weak cues,” noted Ajit Mishra, SVP Research at Religare Broking Ltd. “The session began on a negative note following disappointing results from IT major TCS, which further worsened due to profit-taking in heavyweight stocks across other sectors.”
The broader market mirrored the weakness in benchmark indices, with the Nifty Midcap 100 slipping 0.88 per cent to 58,642.20, and the Nifty Next 50 declining 0.81 per cent to 67,965.55. The market breadth remained weak, with 2,453 stocks declining, against 1,551 advancing on the BSE, while 133 stocks hit 52-week highs, compared to 42 touching 52-week lows.
Currency markets also reflected the risk-off sentiment, with the rupee trading weak by 0.11 per cent at 85.73 against the dollar. “Rupee traded weak by 0.11 per cent at 85.73 as capital market weakness, along with higher gold and silver prices and weak global cues, weighed on sentiment,” said Jateen Trivedi, VP Research Analyst at LKP Securities. “The rise in tariffs from the US on Brazil and Canada has added uncertainty, and the markets will remain cautious until constructive trade talks emerge.”
Commodity markets showed strength amid the uncertainty, with gold prices gaining 0.70 per cent to ₹97,375 and silver surging to an all-time high of ₹1,11,000 per kg on MCX. “Gold prices stayed strong with gains of ₹700 at ₹97,375, rising 0.70 per cent as renewed trade tariff jitters supported bullion,” explained Trivedi. The precious metals rally was attributed to safe-haven demand following US President Donald Trump’s announcement of sweeping new tariffs, including a 35 per cent duty on Canadian imports.
“Silver prices surged to an all-time high of ₹1,11,000 per kg on MCX and surpassed $37.50 per ounce globally on Friday, marking the highest levels in more than 13 years,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd. “The rally was fuelled by intensifying safe-haven demand after US President Donald Trump announced sweeping new tariffs.”
Foreign portfolio investors (FPIs) continued their selling spree, with net outflows of ₹5,179.96 crore recorded in July so far. “FIIs continued to be net cash sellers to the tune of ₹5,179.96 crore to date in July 2025,” confirmed Shrikant Chouhan, Head, Equity Research at Kotak Securities. “Global equity markets were mixed, despite a number of tariff announcements made by the US on its partners.”
Technical indicators painted a bearish picture for the near term. “The Nifty continues to remain weak as the index slipped below the previous swing low on the hourly chart,” observed Rupak De, Senior Technical Analyst at LKP Securities. “Additionally, it has fallen below the 21 EMA on the daily timeframe. Momentum also remains weak in the short term, with the RSI in a negative crossover.”
The weekly performance was equally disappointing, with the Nifty ending 1.22 per cent lower and the Sensex declining by 925 points. “In the last week, the benchmark indices witnessed profit-booking at higher levels,” said Amol Athawale, VP-Technical Research at Kotak Securities. “During the week, the market witnessed range-bound activity, but on last Friday, it breached the important support level of 25,300/83000.”
Market participants expressed caution about the immediate outlook. “Sentiment remained subdued due to ongoing uncertainty around tariff-related issues and a weak start to the earnings season,” Mishra added. “As a result, the Nifty slipped below its first line of defence — the 20-day exponential moving average (20-DEMA) — disrupting the ongoing positive trend.”
Looking ahead, analysts expect continued volatility driven by earnings announcements and global trade developments. “We may now see a phase of consolidation in the index, with upcoming earnings keeping volatility high across sectors,” Mishra cautioned. “In this environment, traders should exercise greater caution, focus on risk management, and be selective while identifying trading opportunities.”
The coming week is expected to bring more corporate earnings announcements, with investors closely watching for signs of margin pressure and forward guidance from companies. “All eyes will be on the outcome of the trade negotiations with the US, markets could see increased volatility in the near term,” warned Prashanth Tapse, Senior VP Research at Mehta Equities Ltd.
Published on July 11, 2025
