Market turns on July 29: Nifty trends, sectors & cues

The Indian stock market witnessed sharp declines on July 28, 2025, as investor sentiment soured amid global uncertainty, weak domestic earnings, and foreign fund outflows. With Nifty 50 and Sensex both closing lower, the focus now shifts to July 29—a date that several analysts believe could mark a potential reversal point for the market. This article dives into the previous session’s action, key levels, sector-specific insights, and what could shape the market’s direction on July 29.

Market Recap: July 28, 2025

The Indian equity benchmarks closed in the red for the fourth consecutive session. The Nifty 50 slipped 156 points or 0.63% to close at 24,680.90, while the Sensex lost 572 points, ending the day at 80,891.02.

The downfall was triggered by several key factors:

• Weak Q1 earnings from Kotak Mahindra Bank and Tata Consultancy Services

• Ongoing uncertainty surrounding India’s trade negotiations with the United States

• Continued selling pressure from foreign portfolio investors (FPIs)

• Broad market weakness, with over 70% of NSE-listed stocks closing in the red

Notably, the financial and IT sectors were the biggest losers, dragging the indices lower. While broader markets showed weakness, the pharma sector stood out with a few green shoots, thanks to strong quarterly results from select companies.

Why July 29 Could Be a Turning Point

1. Technical Reversal Timing

Market watchers and technical analysts are pointing to July 29 as a potentially significant reversal point. Based on historical chart patterns and time-cycle analysis, this date has previously coincided with short-term bottoms or trend changes. The convergence of oversold indicators and key technical support levels has raised the probability of a near-term bounce.

2. Oversold Indicators

Momentum indicators such as the Relative Strength Index (RSI) have slipped below 40 on daily charts for the Nifty, suggesting oversold conditions. Additionally, MACD and Stochastic Oscillator are showing signs of bullish divergence, typically a precursor to a reversal if volume confirms.

3. Short Position Buildup

Derivatives data indicate a sharp rise in short positions across frontline index stocks. While this reflects bearish sentiment, it also lays the groundwork for a short-covering rally—especially if a positive macro or earnings trigger emerges.

Key Technical Levels to Watch on July 29

Understanding critical support and resistance levels can provide actionable insights for traders and investors.

Nifty 50

• Support Zone: 24,600 – 24,645

• Resistance Zone: 24,735 – 24,800

• Breakout Target: Above 24,800, a move toward 24,950 – 25,000 is possible

• Breakdown Risk: A fall below 24,600 could lead to further downside toward 24,450 – 24,400

Bank Nifty

• Support: 56,000

• Resistance: 56,576 – 57,000

• Breakdown Risk: Below 56,000, the index could drop to 55,000

These levels will serve as crucial battlegrounds on July 29. A strong hold or breach of these levels will set the tone for short-term momentum.

Sentiment Drivers That Will Shape July 29

1. Global Market Influence

Global indices such as the S&P 500, Nasdaq, and FTSE will continue to influence Indian sentiment. While U.S. markets have shown resilience in the last session, investor focus remains on the upcoming Federal Reserve policy decision and its commentary on interest rates.

2. India–U.S. Trade Talks

The looming August 1 deadline for trade deal consensus between India and the United States has made markets nervous. Agricultural tariffs and technology transfer issues are believed to be key sticking points. Any easing of this geopolitical uncertainty could trigger a market bounce.

3. Q1 FY26 Corporate Earnings

Earnings remain a mixed bag. Torrent Pharmaceuticals posted a strong ~20% YoY jump in profit, showcasing sectoral strength. On the other hand, Kotak Mahindra Bank disappointed investors with underwhelming results. Key earnings from major banks, auto, and FMCG firms are still awaited.

4. Foreign Institutional Investor (FII) Flows

July has turned into one of the worst months for foreign flows, with persistent net selling from FPIs. While Domestic Institutional Investors (DIIs) have offered some support, the scale of FPI outflows continues to weigh down market sentiment.

Sectoral Outlook

Financials

The financial space took a hit on July 28, mainly led by Kotak Bank’s weak performance. However, frontline banks like ICICI Bank, Axis Bank, and SBI continue to trade around support zones. Bank Nifty needs to sustain above 56,000 for financials to regain momentum.

Information Technology

IT stocks such as TCS and Infosys continue to trade weak due to global demand concerns and ongoing layoffs. Margin pressure and slowdown in tech spending are likely to keep a lid on any near-term rallies in the sector.

Pharmaceuticals

Pharma has emerged as a resilient sector, supported by robust Q1 results from key players like Torrent Pharma. Defensive money continues to flow into names like Cipla, Sun Pharma, and Dr. Reddy’s, making this space relatively safer amid broader volatility.

FMCG

Consumer staples such as Hindustan Unilever and Britannia showed relative strength. With input costs easing and monsoon progress satisfactory, the FMCG space could see accumulation near current levels.

Telecom & Cement

These sectors are considered long-term structural bets, particularly as the government ramps up infrastructure spending. Analysts expect both sectors to outperform in the second half of FY26, provided demand visibility improves.

Potential Market Scenarios for July 29

Bullish Scenario

If Nifty manages to hold above 24,645 and witnesses early buying interest, a rally toward 24,800–24,950 cannot be ruled out. Similarly, a bounce from 56,000 in Bank Nifty could propel it toward 57,000. This scenario may play out if global markets stay stable, trade tensions ease, or earnings surprise on the upside.

Bearish Scenario

A breach of 24,600 on Nifty and 56,000 on Bank Nifty could signal more pain. In this case, the market may slip toward 24,450 or lower. Continued FPI selling and weak global cues would drive this move.

Sideways/Neutral Scenario

Markets could stay range-bound between 24,600–24,800, lacking a strong directional trigger. This setup favors short-term trading strategies and intraday plays over positional bets.

Trading Strategy Toolkit

• Intraday Traders: Watch the first 15-minute candle for momentum direction

• Option Traders: Consider iron condors, debit spreads, or calendar spreads

• Swing Traders: Initiate trades only after a confirmed breakout or breakdown

• Risk Management: Keep stop-losses tight and position sizing conservative

• Long-Term Investors: Focus on fundamentally sound stocks, accumulate in corrections

Events to Watch This Week

• U.S. Federal Reserve’s interest rate decision

• Outcome of India–U.S. trade discussions

• Earnings announcements from HDFC, SBI, Maruti Suzuki, and Cipla

• July-end auto sales data

• Daily FPI/DII trading activity and currency movements

Broader Market Outlook

Despite near-term volatility, the longer-term outlook for Indian equities remains constructive. Analysts project the Nifty 50 to reach 26,000–26,500 by the end of CY2025, driven by:

• Robust domestic demand

• Government-led infrastructure push

• Easing inflation and monetary policy support

• Strong rural consumption during the festive season

Investors are advised to continue with a buy-on-dips approach in structurally strong sectors like telecom, pharma, cement, and private banking.

Action Plan for Investors and Traders

Final Word

The Indian stock market’s July 29 outlook is poised at a critical juncture. With oversold indicators flashing caution and historical patterns signaling potential reversal, this session could prove decisive for traders and investors alike. However, much will depend on earnings outcomes, foreign flows, and trade-related developments.

Prudent risk management, sector rotation, and disciplined execution remain key to navigating this phase. Whether July 29 marks a recovery or continues the correction will soon be evident—but being prepared for either scenario will keep you ahead of the curve.

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