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Stock market today: The Indian stock market has been on a downtrend for four consecutive sessions, with the benchmark Sensex falling over 1,400 points and the Nifty 50 dropping below 25,100.

On Monday, July 14, the Sensex fell 247 points, or 0.30 per cent, to close at 82,253.46, while the Nifty 50 declined 68 points, or 0.27 per cent, to settle at 25,082.30.

With this, the Sensex has fallen 1,459 points, or 1.74 per cent, while the Nifty 50 has retreated 1.72 per cent in four days.

On the other hand, the mid and small-cap segments have outperformed. The BSE Midcap and Smallcap indices rose 0.67 per cent and 0.57 per cent, respectively, on Monday.

Let's take a look at five key factors that have been keeping the Sensex and the Nifty 50 under pressure for the last four consecutive sessions:

US President Donald Trump's fresh aggression on his tariff policies has signalled that a trade war between the US and its trading partners could linger longer than expected and may hit global economic growth deeper than expected.

After announcing a 35 per cent tariff on goods imported from Canada, US President Donald Trump announced a 30 per cent tariff on imports from Mexico and the European Union (EU) starting on August 1.

Meanwhile, media reports suggested the US is mulling an interim trade deal with India that could reduce proposed tariffs to below 20 per cent.

Experts have been flagging risks that the Indian economy, which looks set to clock a growth rate of over 6 per cent in FY26, may not remain entirely immune to global turmoil even if it secures a trade deal with the US.

"The market is expecting a US-India trade deal soon with a tariff rate of around 20 per cent for India. If this happens, the market will get a sentimental boost. Any disappointment on this front can drag the market further down," VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, observed.

Experts say one of the biggest reasons behind the weakness in the benchmarks is the increased interest of retail investors in the mid- and small-cap segments, driven by expectations of a stronger earnings recovery.

Experts believe broader markets may outperform in the short term due to increased retail participation in these segments in search of better opportunities.

"With over 4,000 small- and mid-cap stocks, investors have a wide universe to explore compelling opportunities—whether it's unique growth stories, deep-value plays, or acquisition candidates," said G. Chokkalingam, the founder and head of research at Equinomics Research Private Ltd.

"The rise in India’s retail investor base is also encouraging: more than 22 crore investors are now registered, with nearly six lakh new investors joining every week. This expanding participation bodes well for sustained interest in mid- and small-cap stocks," Chokkalingam added.

Divam Sharma, the co-founder and fund manager of Green Portfolio PMS, believes robust retail investor participation will likely drive a re-rating in valuations for many companies, making the Indian stock market more resilient.

Foreign portfolio investors (FPIs) have been selling Indian equities after buying them for four consecutive months. This is keeping the benchmarks under pressure as FPIs have higher ownership in large-caps.

Data show that FPIs sold Indian equities worth over ₹10,000 crore in the cash segment in July so far (till 11th).

Amid anticipation of mixed Q1 earnings, investors appear concerned about stretched valuation of the Indian stock market. The current price to earnings ratio (PE) of the Nifty 50, at 22.6 is above its one-year average PE of 22.2, with material earnings recovery expected only after the September quarter of the year.

According to Shrikant Chouhan, the head of equity research at Kotak Securities, as long as the market remains below 25,350/83,200, the sentiment will remain weak.

"Below this level, the market may slip towards the 50-day SMA or around 25,050/82,000. Further downside may continue, taking the market down to 24,900-24800/81,500-81,200," said Chouhan.

Rupak De, Senior Technical Analyst at LKP Securities, pointed out that the Nifty 50 slipped towards 25,000 on an intraday basis, which is very close to the 50-DMA.

De said support is placed at 24,900–24,950 on the lower end. If this zone holds, a rally towards 25,350 looks possible. However, failure to sustain above 24,900 may trigger a deeper phase of correction, De added.

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stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

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