Nifty50 ends below 24,900; BSE Sensex down almost 700 points

Stock market today

Nifty50 and BSE Sensex, the Indian equity benchmark indices, tanked in trade on Friday. While Nifty50 went below 24,900, BSE Sensex ended almost 700 points down. Nifty50 closed the day at 24,870.10, down 214 points or 0.85%. BSE Sensex ended at 81,306.85, down 694 points or 0.85%.

The stock market ended its six-day positive streak, as investors exhibited caution before Federal Reserve Chair Jerome Powells speech at the Jackson Hole symposium and anticipated new US tariffs on Indian products, alongside other factors affecting market sentiment.

Vinod Nair, Head of Research, Geojit Investments Limited says, “The Indian equity market closed in the red today, ending a six-session winning streak and erasing gains accumulated over the past three days. Investor sentiment turned cautious ahead of the US Fed Chair’s speech at the Jackson Hole symposium, which is expected to provide critical insights into the global liquidity outlook and future interest rate trajectory. The US using trade tariffs on India as a strategic tool in its stance against Russia has raised near-term concerns among institutional investors. However, strong domestic indicators offer support: the PMI has hit a record high and recently proposed indirect tax reliefs are expected to boost consumption, underscoring India’s economic resilience. Why did stock market fall today? Top 5 reasons

1. Caution ahead of Powell’s Jackson Hole address

Investors remained reserved before US Federal Reserve Chair Jerome Powells address at the Feds annual Jackson Hole conference. Market participants seek information about whether the US central bank will reduce rates by 25 basis points in September as anticipated. Expectations for a rate reduction have decreased following the Feds July meeting minutes, which revealed disagreements among policymakers.

Reduced US interest rates generally increase the attractiveness of emerging markets like India, but current uncertainty has affected market confidence.

IT stocks, which had increased by 3% over the past three sessions, declined by 0.6% Friday.

2. US Tariff Impact

The additional 25% tariff on Indian exports announced by US President Donald Trump is set to take effect August 27. These duties could increase the total levies on certain exports to 50%, representing some of the highest rates imposed on any US trade partner.

The headwinds for the market from Trump tariffs will weigh on markets constraining the rally of the last six days, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. Vijayakumar cautioned that the implemented tariffs could impact Indias growth beyond the currently projected 20-30 basis points.

3. Market Consolidation

Following six consecutive days of gains, the markets witnessed profit-booking, particularly affecting financial and IT sectors, leading to declines across major sector indices, according to an ET report.

During the preceding six-day positive streak, the Nifty and Sensex recorded gains of 2.4% and 2.2% respectively, supported by positive sentiment from GST revisions and an improved S&P sovereign rating.

The session saw prominent banks including HDFC Bank and ICICI Bank decline by more than 1%. Among sectors, pharmaceutical and consumer durables segments showed resilience, maintaining positive territory whilst others declined.

4. FII Exit Pattern

International institutional investors continued to reduce their positions, selling Rs 31,889 crore across eight sectors in early August, with financial and IT sectors seeing significant outflows. Their total equity sales reached Rs 20,976 crore during this period, following Julys exit trend and raising 2023s net outflows to approximately Rs 1.2 lakh crore.

On August 13, Jefferies reported that foreign portfolio investment levels in India have reached their lowest point in a decade. Despite domestic investments providing some protection against market decline, the firm advised that any upward movements might be short-lived.

5. Technical Analysis Insights

The Niftys upward movement stalled near 25,153, reaching Geojits short-term targets. Anand James, Chief Market Strategist at the firm, indicated that current technical indicators lack the force needed for further advances, although a significant decline appears unlikely.

At Kotak Securities, Head of Equity Research Shrikant Chouhan observed market uncertainty following a higher opening. He identified key support levels at 25,000/81,700 and 24,950/81,500, with resistance at 25,150/82,300 and 25,250/82,500. He warned that movement below 24,850/81,200 could trigger negative sentiment.

Regarding the Bank Nifty, Chouhan noted an inside body formation, suggesting potential upward movement to 56,200–56,500 if it crosses 56,000, while a decline below 55,500 could lead to levels of 55,350–55,000.

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