July 25, 2025
Sahil Aggarwal
(Editor-in-Chief)
Indian stock markets started Thursday on a weak note as benchmark indices Nifty 50 and BSE Sensex slipped into negative territory. The sharp decline was largely triggered by a steep fall in Bajaj Finance shares, following investor concerns over deteriorating loan quality in its MSME portfolio.
Bajaj Finance Leads Market Decline Despite Profit Growth
In an unexpected twist, Bajaj Finance, which had posted a strong earnings report for Q1 FY26, became the market’s biggest drag. The company reported a robust rise in profit, but underlying asset quality issues raised red flags. Its gross non-performing assets (GNPA) jumped to 1.03%, compared to 0.86% a year earlier, signaling rising stress in its lending book – especially in the micro, small, and medium enterprise (MSME) segment.
This triggered a sell-off in Bajaj Finance stock, which fell nearly 6% intraday, wiping out significant market capitalization and dragging down financial sector indices along with it.
Benchmarks Tumble: Nifty Below 25,000, Sensex Sheds Over 350 PointsBajaj Finance
As selling pressure intensified, the Nifty 50 slid to 24,930, down over 130 points, while the BSE Sensex dropped by more than 350 points to settle near 81,800. Broader market indices mirrored the decline, with both Nifty Midcap 100 and Smallcap 100 losing 0.5% to 0.8%, signaling widespread investor caution.
Sectoral Impact: Financials, IT, and FMCG Take a Hit
The ripple effect of Bajaj Finance’s fall was visible across sectors. Financial stocks led the losses, followed by information technology and consumer goods. Out of 16 sectoral indices, 13 traded in the red, highlighting weak market breadth. Investor mood was further dampened by global cues, cautious institutional flows, and persistent uncertainty around U.S. trade policy shifts.
Few Bright Spots Amid the Gloom
Despite the bearish momentum, a few stocks managed to buck the trend:
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SBI Life Insurance gained over 2% as quarterly performance showed steady growth in renewal premiums.
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Trident Ltd. rallied 4.5%, fueled by optimism following India’s new trade agreements with the UK.
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Indian Energy Exchange (IEX) rebounded almost 9% after a sharp correction earlier this week, supported by improved volume outlook.
Rupee Weakens to One-Month Low
Adding to the market woes, the Indian rupee weakened to ₹86.57 against the U.S. dollar, marking its lowest level in a month. Traders attributed the drop to foreign outflows from equities and dollar strength globally. Analysts expect the rupee to test ₹86.80 levels if global risk-off sentiment persists.
Looking Ahead: Market Faces Near-Term Headwinds
With Bajaj Finance’s asset quality now under intense scrutiny and broader global uncertainty lingering, Indian equities may remain volatile in the coming sessions. Investors are advised to stay selective and focus on fundamentals, as near-term triggers will include U.S. Federal Reserve policy cues, crude oil prices, and earnings from heavyweight domestic firms.
