Sensex and Nifty Close in Red
Indian benchmark indices Sensex and Nifty ended the trading session lower on Friday, August 22, 2025, snapping a six-day rally.
- BSE Sensex: Fell 693.86 points (0.85%) to 81,306.85
- NSE Nifty: Dropped 213.65 points (0.85%) to 24,870.10
The market correction comes amid caution ahead of U.S. Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium and anticipation of fresh U.S. tariffs on Indian goods, along with other global headwinds.
Key Reasons Behind the Decline
1. Caution Ahead of Jackson Hole
Investors remained cautious ahead of the Jackson Hole symposium, seeking clarity on the U.S. interest rate trajectory. Uncertainty over potential rate cuts in September impacted market sentiment, particularly in sectors like IT, which saw minor corrections after recent gains.
2. U.S. Tariff Concerns
The U.S. government recently announced an additional 25% tariff on Indian goods, effective August 27, 2025, potentially raising duties on some exports to 50%. This move weighed on investor confidence, raising concerns over near-term trade and growth impact.
3. Profit Booking After Six-Day Rally
After a sustained rally, investors booked profits, particularly in financial and IT sectors, resulting in a 1% decline in major indices. Previous gains had been driven by optimism over Goods and Services Tax revisions and a sovereign rating upgrade, which spurred consumption and market momentum.
4. Foreign Institutional Investor (FII) Outflows
Foreign institutional investors continued trimming their holdings, with net outflows extending from July, affecting financials and IT sectors. While domestic inflows provided some support, overall FII activity contributed to market weakness.
5. Technical Consolidation
Market indices paused after reaching recent highs, indicating short-term consolidation before the next potential rally. Support levels for Nifty remain around 24,800, with resistance near 25,153–25,250.
Sectoral Performance
- Key Lagging Sectors: Financials, IT
- Better Performing Sectors: Pharma, Consumer Durables
- Notable Stock Movements: HDFC Bank and ICICI Bank witnessed modest declines
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own research or consult certified financial advisors before making any trading decisions.
