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Informist, Tuesday, Aug. 26, 2025

By Simran Rede

MUMBAI – Indian equity market declined Tuesday as investors turned cautious ahead of the additional 25% US tariffs on Indian imports in the US, effective Wednesday at 0931 IST. Additionally, sentiment was hit after US President Donald Trump threatened countries with digital taxes with "subsequent additional tariffs" on their goods if they do not remove such taxes.

The Nifty 50 ended at 24712.05, down 255.70 points or 1%, and the BSE Sensex closed at 80786.54, down 849.37 points or 1%. Most index heavyweight stocks such as HDFC Bank, ICICI Bank, and Reliance Industries pulled down the 50-stock index. Shares of financial services were the biggest drag on the Nifty 50. All broader indices ended lower and fell sharply lower than their benchmark peers. Nifty Smallcap 50 was the worst hit, closing 2.1% lower. On the thematic front, the Nifty India Defence fell 2.3% after recent gains.

The overall market was down Tuesday, except for some fast-moving consumer goods companies. The Nifty FMCG closed 0.9% higher and was the only sectoral index to close in positive territory. Adding to the negativity, the near-term nervousness in the market increased, with the India VIX, the fear gauge of Dalal Street, rising 3.7% to 12.1925.

Prices of crude oil fell marginally as markets balanced potential rate cuts in the US amid ongoing geopolitical and supply pressures. Federal Reserve Chair Jerome Powell signalled a possible quarter-point rate cut in September, supporting crude oil prices by boosting expectations for economic growth and demand in the US. Tariff pressures from the US, raising duty on Indian imports to 50% due to India's purchases of crude oil from Russia and ongoing Russia-Ukraine tensions added to market uncertainty, keeping oil largely volatile. At 1629 IST, the Brent Crude oil futures October contract traded on the Intercontinental Exchange was down 1.7% at $67.66 per barrel.

Few media houses reported Trump will significantly lower the drug prices in the US within 60 days, with a deadline of Sept. 29. Trump had even earlier said the same. "You know, we've cut drug prices by 1,200, 1,300, 1,400, and 1,500%," CNN quoted Trump as saying on Aug. 11, noting the reductions will start over the next two to three months. "I don't mean 50%. I mean 1,400–1,500%," the report said. However, experts say such cuts in drug prices are mathematically impossible, the report said. 

The Nifty Pharma and Nifty Healthcare indices snapped a three-session rising streak and closed nearly 2% lower each, being among the worst-hit sectoral indices. Sun Pharmaceuticals Industries fell over 3% after BofA Securities downgraded the stock to 'underperform' from 'neutral' and slashed the target price by over 9% to INR 1,570, which implies a downside of 5% from the stock's previous closing price.

Nifty Realty was the worst-hit sectoral index and closed 2.2% lower. The government's proposed simplification of goods and services tax into two primary slabs of 5% and 18%, expected to be announced this Diwali, will deliver targeted benefits for the residential property sector, said Akash Pharande, managing director of Pharande Spaces, in a note. "The most notable impact comes from lowering GST on cement from 28% to 18%, because this would reduce developers' input costs by about 10%," he said.

Affordable housing, currently taxed at just 1%, is not expected to see much of a direct impact, according to Pharande. However, the segment may gain from lower input costs if the input tax credit is restored, he said. "This would potentially reduce property prices in this vital housing segment by 2-4%. In the mid-segment housing sector, a potential GST reduction from 5% to 3% would mean that prices could possibly reduce by around 2-3% if developers pass the benefit on to their buyers," he said. Additionally, US tariffs do not have an immediate impact on the realty sector, but they still create a significant ripple effect on the cost of construction.

Ola Electric Mobility rose nearly 5% after the company received a certification from the government for production-linked incentives for its Gen 3 scooter portfolio. The stock was the top gainer in the Nifty 200. Vodafone Idea declined over 9% and was the worst hit in the Nifty 200 after media reports said that the government had no plans to provide any further relief for the telecom operator.

BLS International Services rose nearly 7% intraday but came off highs and closed 1% higher. The company got an order of INR 20.55 billion from the Unique Identification Authority of India to provide services for the establishment and running of district-level Aadhaar Seva Kendras.

Colgate-Palmolive (India) closed flat after a CNBC-TV18 report cited government sources saying the goods and services tax rate on toothpaste is likely to remain unchanged at 18%. The stock had risen around 1.3% earlier in the day after the media house reported citing sources that GST on toothpaste may be reduced to 5% or may remain unchanged at 18%. 

Shreeji Shipping Global, Patel Retail, Vikram Solar, and Gem Aromatics rose significantly after all listing at a premium to the issue price.

* Of the Nifty 50 stocks, 8 rose and 42 fell 

* Of the Sensex stocks, 6 rose and 24 fell

* On the NSE, 728 stocks rose, 2,280 fell, and 78 were unchanged

* On the BSE, 1,220 stocks rose, 2,891 fell, and 130 were unchanged

* Nifty India Defence: down 2.3%; Nifty Realty: down 2.2%; Nifty FMCG: up 0.9%

BSE                                              NSE

Sensex: 80786.54, down 849.37 points or 1%       Nifty 50: 24712.05, down 255.70 points or 1%

End

Edited by Akul Nishant Akhoury

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