Nifty and Sensex Fall Over 1%; Nifty Records Sharpest Single-Day Decline in Over 3 Months

Market Update at 4:15 PM: On Tuesday, August 26, Indian equity markets witnessed a sharp decline as the U.S. government confirmed a 50 per cent tariff on Indian exports, effective from August 27, 2025. The Nifty 50 ended the day down by 225.70 points, or 1.02 per cent, at 24,712.05, recording the highest intraday volumes in the last three months and the sharpest single-day fall in over three months. The BSE Sensex tumbled by 849.37 points, or 1.04 per cent, to 80,786.54. Broader markets were dragged down by Realty and PSU Banking stocks.

The Nifty 50’s decline was driven by multiple factors, including heavy volumes in the last minutes of trading. Global markets also traded lower amid risk aversion, while crude oil hovered near a two-week high, raising inflation concerns. Among sectoral indices, only 1 out of 11 key indices ended in positive territory, with broader indices like the Nifty Midcap 100 and Smallcap 100 closing in the red.

Vodafone Idea shares plunged 9.32 per cent after the Centre ruled out further AGR relief. Protean eGov Technologies surged 7.82 per cent following a Rs 1,160 crore Aadhaar order from UIDAI. Ola Electric jumped 4.63 per cent after securing a compliance certificate under the production-linked incentive (PLI) scheme for its Gen 3 scooter lineup.

The Nifty FMCG index emerged as the top-performing sectoral index, advancing 0.91 per cent, led by Britannia and Hindustan Unilever. In contrast, the Nifty Realty index fell 2.24 per cent, making it the worst performer of the day. Among Nifty 50 stocks, Hindustan Unilever contributed +11.53 points, ITC added +8.51 points, and Maruti added +6.64 points. On the downside, Reliance Industries dragged -40.96 points, followed by HDFC Bank (-30.38 points) and ICICI Bank (-27.17 points).

Mid-Cap and Small-Cap stocks were hit harder, with the Nifty Midcap 100 index down 1.62 per cent and the Smallcap 100 index down 2.03 per cent. Market breadth was negative, with 728 advancing, 2,280 declining, and 78 unchanged out of 3,086 NSE-listed stocks. A total of 52 stocks touched their 52-week highs, while 68 hit their 52-week lows. Additionally, 57 stocks were locked in upper circuits, and 90 stocks were in lower circuits.

The sharp fall in the Nifty and Sensex highlights the impact of external factors such as USD tariffs, coupled with domestic sectoral pressures.

Market Update at 12:15 PM: Indian stocks extended their losing streak on Tuesday as Dalal Street braced for the impact of additional US tariffs set to be imposed from Wednesday. At 12:10 PM, the BSE Sensex was down 521.66 points, or 0.64 per cent, at 81,114, while the NSE Nifty 50 declined 165 points, or 0.66 per cent, to 24,802.

Investor sentiment was further dampened after US President Donald Trump announced the dismissal of Fed Governor Lisa Cook on allegations of falsifying mortgage documents. Adding to concerns, Trump warned of potential export curbs on semiconductor chips in response to digital services taxes levied by other nations.

Heavyweights including Sun Pharma, Tata Steel, ICICI Bank, BEL, Adani Ports, Bharti Airtel, Power Grid, Tata Motors, HDFC Bank, NTPC, Axis Bank, and Trent witnessed declines. These Large-Cap stocks dragged the indices lower, impacting overall market sentiment.

The broader markets mirrored the weakness, with the Nifty MidCap index down 1 per cent and the Nifty SmallCap index slipping 1.4 per cent. Despite the multibagger potential often associated with small-cap stocks, the current market volatility weighed heavily on investor participation.

Among sectoral indices, Nifty Realty emerged as the top loser, falling 1.6 per cent. This was followed by Nifty Pharma, down 1.4 per cent, and Nifty Metal and Nifty PSU Bank, each declining 1 per cent. The selling pressure across these sectors overshadowed any positive cues from Quarterly Results or dividend announcements.

Market Update at 10:30 AM: India’s equity benchmarks opened lower on Tuesday as investor sentiment weakened ahead of the additional 25 per cent U.S. tariffs on Indian goods, which are set to take effect on Wednesday.

The Nifty 50 index fell 0.6 per cent to 24,818.8 points, while the BSE Sensex declined 0.61 per cent to 81,135.1 as of 9:22 a.m. IST. Market breadth remained weak, with fifteen of the sixteen major sectors trading lower. The broader mid-cap and small-cap indices also slipped about 1 per cent each, reflecting broad-based selling pressure.

The move comes after U.S. President Donald Trump announced a 25 per cent punitive tariff on Indian goods, citing New Delhi’s purchase of Russian oil during the Ukraine conflict. This tariff is in addition to the earlier 25 per cent duties already imposed. According to a notification issued on Monday, the U.S. Department of Homeland Security has outlined the procedure to implement these additional duties on Indian exports.

Pre-Market Update at 7:30 AM: Indian equity benchmarks, the Sensex and Nifty 50, are likely to open lower on Tuesday, August 26, tracking weak global market cues ahead of the US tariffs deadline on Indian goods. As of 7:07 AM, the GIFT Nifty was trading near 24,928, down 65 points from its previous close.

Asian markets traded lower, with Japan’s Nikkei 225 down over 1 per cent. On Wall Street, US indices ended in the red on Monday as traders weighed the outlook for interest rates and awaited Nvidia’s quarterly results. The Dow Jones Industrial Average declined 0.77 per cent to 45,282.47, the S&P 500 fell 0.43 per cent to 6,439.32, and the Nasdaq slipped 0.22 per cent to 21,449.29.

Foreign Institutional Investors (FIIs) were net sellers on Monday, August 25, offloading equities worth Rs 2,466.24 crore. On the other hand, Domestic Institutional Investors (DIIs) turned buyers and purchased shares worth Rs 3,176.69 crore.

Equities began the week on a strong note, with the Nifty 50 closing at 24,967.75, up 0.39 per cent, while the Bank Nifty ended almost unchanged at 55,139.30. IT stocks led sectoral gains, supported by Realty and Consumer Durables. Mid-cap and small-cap indices finished flat to slightly higher, continuing investor interest across segments.

US President Donald Trump dismissed Federal Reserve Governor Lisa Cook, citing allegations of mortgage fraud. On trade, Trump threatened tariffs of up to 200 per cent on China unless it supplies magnets to the US. He also warned that countries enforcing digital taxes on American firms could face tariffs on their exports.

In economic data, US new single-family home sales slipped 0.6 per cent in July to an annualised 6,52,000 units, though June’s numbers were revised higher.

The US dollar index slipped 0.3 per cent to 98.187 in early Asian trade following Trump’s announcement regarding the Fed official. Gold prices fell 0.4 per cent to USD 3,353.14 per ounce on possible profit-taking. Brent crude oil futures declined to USD 68.4 per barrel, while WTI crude futures dropped to USD 64.4 per barrel, retreating after recent gains.

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