The Indian stock market has experienced a significant decline, with the BSE Sensex and NSE Nifty both falling sharply. This downturn is attributed to a combination of factors, including weak corporate earnings, uncertainties surrounding trade negotiations, and concerns over the adoption of artificial intelligence (AI) in the workforce.
On July 28, 2025, the BSE Sensex closed at 80,870.48, down 593 points, while the NSE Nifty ended at 24,680.90, a decrease of 156 points. The decline was particularly pronounced in the information technology (IT) sector, with major companies like Tata Consultancy Services (TCS) announcing workforce reductions due to increased AI adoption. TCS reported a 2% reduction in its workforce, affecting over 12,000 employees, primarily in middle and senior management roles. This decision reflects the company's efforts to adapt to evolving market demands and technological advancements.
Additionally, the market sentiment was influenced by weak earnings reports from financial institutions. Axis Bank, for instance, reported a surprise decline in quarterly profits, attributed to rising bad loans linked to a one-time industry benchmarking review. This news contributed to a 4% drop in Axis Bank's shares, marking its steepest decline in six months. The broader financial sector also faced challenges, with indices for financial and private banks losing 0.5% and 1.1%, respectively.
Uncertainties surrounding trade negotiations, particularly between India and the United States, have further dampened investor confidence. Stalled discussions over tariffs on agriculture and dairy products have created an environment of caution among investors, leading to increased volatility in the markets.
In response to these developments, the Reserve Bank of India (RBI) has been proactive in managing inflation and maintaining economic stability. The RBI has implemented measures to support the economy, including monetary policy adjustments and liquidity management strategies. Investors are advised to remain vigilant, focusing on long-term potential while navigating the immediate challenges posed by market volatility and economic uncertainties.