Mumbai | August 26, 2025 –The Sensex opened lower at 81,377.39 and slid to an intraday low of 80,940.67, down nearly 700 points from its previous close of 81,635.91. Similarly, the Nifty 50 slipped to 24,755.60 after opening at 24,899.50, failing to hold the 25,000 mark.
Broader markets also faced the heat, with BSE Midcap and Smallcap indices tumbling up to 1.5 per cent. Investor wealth eroded sharply as the total market capitalisation of BSE-listed firms shrank by nearly ₹5 lakh crore, falling from ₹455 lakh crore in the previous session to about ₹450 lakh crore.
As of 12:10 PM, the Sensex was trading 543 points lower at 81,092.87, while the Nifty was down 167 points at 24,801.
What Triggered the Fall?
Analysts pointed to five major factors weighing on investor sentiment:
1. Trump’s Tariff Shock
The biggest drag came from fears of steep US tariffs. With the August 27 deadline looming, the Trump administration has signaled a 50% tariff on Indian exports, linking it to geopolitical pressure on Russia. Hopes of a last-minute truce between India and the US have faded, raising fears of a prolonged trade war.
2. Stretched Valuations
Markets remain richly valued despite lackluster earnings. At nearly 19 times projected FY27 earnings, valuations appear expensive. Analysts warn that while earnings may improve from Q3FY26 due to a low base and seasonal demand, current prices have already discounted much of the optimism.
3. Persistent FII Selling
Foreign Institutional Investors (FIIs) continue to dump Indian equities. August alone has seen ₹28,217 crore worth of outflows in the cash segment, following July’s massive ₹47,667 crore selloff. Although FIIs remain active in primary markets, their retreat from secondary markets has dented confidence.
4. Global Headwinds
Weak cues from global markets added to the pressure. Asian indices like Nikkei and Kospi slipped around 1 per cent, mirroring overnight US losses. Sentiment soured further after President Trump abruptly fired Federal Reserve Governor Lisa Cook, raising concerns over Fed independence at a time when rate cuts are hotly debated.
5. Technical Resistance Near 25,000
The Nifty’s repeated failure to cross and sustain above the 25,000 mark has triggered profit booking. Analysts suggest that 25,000 remains a crucial breakout level, while 24,850–24,900 is the immediate support zone. A breach below these levels could drag the index towards 24,670.
Outlook
Market experts remain cautious, urging investors to brace for volatility until clarity emerges on tariffs and global developments. “The 25k level on Nifty will act as a make-or-break point in the near term. Unless there is a strong global trigger, upsides could remain capped,” said Anand James, Chief Market Strategist at Geojit Investments.
📌 Disclaimer: This article is for informational purposes only. Market investments involve risks, and readers are advised to consult certified financial experts before making decisions.