Markets End Lower: 2-Day Rally End as Reliance Drags; Textile Stocks Slide

Market Update at 4:15 PM: On Thursday, July 31, Indian benchmark indices ended their two-day winning streak, closing lower amid pressure from heavyweight stocks like Reliance Industries and Bharti Airtel. The Nifty 50 declined by 86.70 points or 0.35 per cent to settle at 24,768.35, while the Sensex slipped 296.28 points or 0.18 per cent to close at 81,185.58.

The market opened on a weak note after U.S. President Trump announced a 25 per cent tariff on Indian imports. Although a partial recovery was seen intraday following Trump’s remarks about ongoing trade talks, the indices lost steam post-midday. The Nifty 50 retreated from its 50-day exponential moving average (DEMA), giving up earlier gains.

Only 2 out of the 11 major sectoral indices managed to close in positive territory. Mid-Cap and Small-Cap stocks underperformed the broader market, with the Nifty Midcap 100 index declining by 0.93 per cent and the Nifty Smallcap 100 index falling by 1.05 per cent.

Textile stocks were among the hardest hit, reacting sharply to the tariff announcement. Shares of Welspun Living, Vardhman Textiles and KPR Mills dropped between 3 and 6 per cent. These companies, which rely heavily on exports, witnessed investor selling amid trade concerns.

On the other hand, Hindustan Unilever’s share price gained 3.44 per cent after it reported higher profits for the June quarter, supported by a recovery in rural demand. Among mid-sized companies, IT firm Sagility India posted a seven-fold jump in quarterly profit, leading to a 10 per cent surge in its share price. Jio Financial Services also saw a 2.79 per cent rise after announcing a fundraise via 500 million warrants.

Sectorally, the Nifty FMCG index emerged as the top gainer, supported by gains in Emami and Hindustan Unilever. The Nifty IT index also ended higher by 1.34 per cent. In contrast, the Nifty Metal index was the top loser of the day, led by weakness in Adani Enterprises and Tata Steel.

Among the Nifty 50 stocks, Hindustan Unilever, ITC and Kotak Bank added 20.96, 10.66 and 7.78 points to the index, respectively. Meanwhile, Reliance Industries (-19.23 points), Bharti Airtel (-12.39 points) and Infosys (-10.25 points) were the key drags.

Market breadth was negative with 1,907 declining stocks versus 1,047 advancing on the NSE out of a total of 3,044 traded. While 72 stocks hit their 52-week highs, 50 touched their 52-week lows. A total of 82 stocks were locked in upper circuits, while 60 hit lower circuits.

Market Update at 12:30 PM: Indian equity benchmarks pared early losses on Thursday as market participants interpreted the United States' proposed 25 per cent tariff and unspecified penalties on India, effective August 1, more as a negotiation tactic than a definitive move.

The Nifty 50 index was down 0.26 per cent at 24,791.45 points, while the BSE Sensex slipped 0.28 per cent to 81,259.37 as of 11:40 a.m. IST. Both indices had fallen nearly 0.9 per cent in morning trade following the announcement.

U.S. President Donald Trump indicated that the U.S. was still negotiating with India on trade after revealing the tariff measures, which include a penalty for India's energy and defence engagements with Russia.

Market breadth remained weak with losses seen across 14 of the 16 major sectors. Broader indices were also under pressure, with the Smallcap index declining around 0.6 per cent and the Midcap index falling 1 per cent.

Textile manufacturers were among the worst-hit stocks. Shares of Welspun Living, Vardhman Textiles, and KPR Mills dropped between 3 per cent and 6 per cent following the tariff threat, weighing on the sector’s outlook.

However, some Large-Cap and mid-cap companies bucked the broader trend on the back of strong Quarterly Results. Hindustan Unilever Ltd (HUL) gained 3.4 per cent after reporting higher profits for the June quarter, driven by improving rural demand. Navin Fluorine International rose 3.5 per cent after posting a significant profit rise in its June results.

Sagility India, an IT company, surged 7 per cent after reporting a seven-fold jump in Q1 net profit, boosting investor sentiment in select tech counters. Meanwhile, Jio Financial Services rose 3 per cent after its board approved a fundraise via the issuance of 500 million warrants, a move that could support future growth.

Market Update at 10:30 AM: Indian stock markets fell sharply on Thursday, July 31, after the United States announced a 25 per cent tariff on goods imported from India starting August 1, along with an additional unspecified penalty related to energy and defence trade with Russia. This announcement unsettled investors and triggered broad-based selling across sectors.

The Nifty 50 index dropped 0.61 per cent to close at 24,703.1, while the BSE Sensex declined 0.64 per cent to settle at 80,963.14 by 9:46 a.m. IST. All 16 major sectoral indices ended in the red. The broader market also mirrored this weakness, with the CNX Smallcap and CNX Midcap indices falling around 0.6 per cent and 0.9 per cent, respectively.

The proposed 25 per cent tariff is seen as a disproportionate measure against India compared to other trade partners, and it could disrupt ongoing bilateral trade discussions. U.S. President Donald Trump, while announcing the tariffs, mentioned that negotiations with India are still in progress and expected to resume by mid-August. Until then, analysts expect market volatility to persist.

Reflecting these concerns, shares of textile companies fell sharply. Welspun Living, Vardhman Textiles, and KPR Mills dropped between 3 per cent and 6 per cent in early trade.

However, a few stocks bucked the downtrend. Chemicals manufacturer Navin Fluorine gained 4 per cent following a strong set of quarterly results for the June quarter. IT services firm Sagility India surged 5 per cent after reporting a seven-fold increase in its Q1 profit. Jio Financial Services also rose 3 per cent after its board approved a Rs 500 crore fundraising plan through the issuance of 500 million warrants.

Markets are likely to remain cautious ahead of further developments in trade talks, with participants closely watching global cues and policy responses.

Pre-Market Update at 7:45 AM: Indian stock markets are expected to open lower on Thursday, July 31, as GIFT Nifty indicated a gap-down start, trading at 24,673 — down by 181 points from its previous close. The decline follows a significant announcement by U.S. President Donald Trump, who declared a 25 per cent tariff on Indian goods starting August 1. He cited India’s “high trade barriers” and warned of an additional penalty related to India’s defence and energy partnerships with Russia. The announcement was made via a post on Trump’s Truth Social account.

This development, coupled with the U.S. Federal Reserve’s policy update and comments by Chair Jerome Powell, has weighed on global sentiment. Asian markets opened mixed, while U.S. indices ended Wednesday’s session mostly lower. The Dow Jones Industrial Average dropped 171.71 points (0.38 per cent) to 44,461.28, while the S&P 500 lost 7.96 points (0.12 per cent) to close at 6,362.90. However, the Nasdaq Composite managed a modest gain of 31.38 points (0.15 per cent) to end at 21,129.67.

The U.S. Fed kept benchmark interest rates steady at 4.25–4.5 per cent for the fifth straight time, citing continued labour market strength and “somewhat elevated” inflation. Powell’s cautious tone reduced hopes for a rate cut in September. Meanwhile, the U.S. economy expanded by 3.0 per cent in Q2 2025 on an annualised basis, rebounding from a 0.5 per cent contraction in Q1 and surpassing estimates of 2.4 per cent. The nominal size of the U.S. economy has now crossed USD 30 trillion before adjusting for inflation.

Back home, Indian equities advanced for a second session on Wednesday. The Nifty 50 rose 33.95 points (0.14 per cent) to close at 24,855.05, and the Sensex added 143.91 points (0.18 per cent) to end at 81,481.86. However, market sentiment may reverse today amid global headwinds and geopolitical concerns.

Investors will closely watch quarterly results (Q1 FY26) of 15 major companies, including Hindustan Unilever, Sun Pharmaceutical Industries, Mahindra and Mahindra, Maruti Suzuki India, Adani Enterprises, Coal India, Vedanta, Ambuja Cements, Eicher Motors, TVS Motor Company, Cholamandalam Investment and Finance Company, Mankind Pharma, Swiggy, Dabur India, and JSW Energy. These results could impact sectoral sentiment in large-cap and mid-cap segments.

In terms of institutional activity, Foreign Institutional Investors (FIIs) were net sellers for the eighth consecutive session on Wednesday, offloading shares worth Rs 850.04 crore. In contrast, Domestic Institutional Investors (DIIs) extended their buying streak to 18 sessions, with a net purchase of Rs 1,829.11 crore.

On the commodities front, gold prices recovered from a one-month low amid renewed demand driven by trade uncertainty. Spot gold gained 0.4 per cent to USD 3,286.99 per ounce, while U.S. gold futures declined 0.5 per cent to USD 3,282.10. Crude oil prices rose for the fourth session in a row, with Brent crude up 0.33 per cent to USD 73.48 and WTI up 0.29 per cent to USD 70.20 per barrel.

The U.S. dollar strengthened following the Fed’s announcement. The dollar index gained 1.01 per cent to 99.89, reflecting its strength against major currencies like the yen and euro.

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Disclaimer: The article is for informational purposes only and not investment advice.