More Stories

Informist, Thursday, Aug. 28, 2025

 

By Simran Rede

 

MUMBAI – Following the implementation of additional 25% tariffs on Indian imports into the US, the market is expected to continue its southward journey Friday. On the technical charts, the Nifty 50 has breached and is moving below the 100-day exponential moving average, which suggests a negative bias for the index, according to technical analysts. 

 

The Nifty 50 closed at 24500.90, down 211.15 points, or 0.9%. The BSE Sensex ended at 80080.57, down 705.97 points or 0.9%. Traders unwound their long positions Thursday on the expiry of the August monthly contract of Nifty 50 derivatives. The Nifty 50 is expected to find support at 24250–24350 points and face resistance at 24650–24800 points, technical analysts said.

 

"...it is advisable to consider reducing long positions on any bounce for the time being," Osho Krishan, senior technical and derivatives analyst at Angel One, said in a note. "Going ahead to pause the current down trend the index needs to start forming higher high and higher low in the daily chart, failure to do so will keep the bias down," Bajaj Broking Research said in a note.

 

On the tariffs front, around 60% of US imports from India will face 50% tariffs, taking the effective tariff rate to 33.6%, Nomura Global Markets Research said in a report. It expects the reciprocal tariffs to stay at 25% through 2025-26 (Apr-Mar), but the 25% penalty will be removed after November.

 

"It is my firm belief that diversification of exports away from the US should not be a major problem though it could take about three months," said Vinit Bolinjkar, head of research at Ventura Securities. "In the current situation the way the geopolitical environment is unravelling the coterie of BRICS could lead to isolation of the US a situation that the latter would want to avoid."

 

Industrial production in India rose to a four-month high of 3.5% in July from a 10-month low of 1.5% in June picked up on the back of an improvement in the performance of the manufacturing sector, the data by the statistics ministry showed Thursday after market hours. Friday, the market may take cues from the more-than-anticipated July IIP growth print. Investors will also keep an eye on the June quarter GDP data, which is due at 1600 IST Friday. 

 

Nomura recently lowered its GDP growth estimate for FY26 to 6.0% on year from 6.2%, due to weaker exports, spillovers to the labour market and investments, which it expects will more than offset any boost in goods and service tax. It has retained its CPI inflation forecast for FY26 at 2.7% on year, even though it sees downside risks, amid likely disinflation due to GST changes and weaker demand.

 

The brokerage expects the current account deficit to widen marginally to 1% of GDP in FY26 but believes to achieve the fiscal deficit target of 4.4%. The Reserve Bank of India's current growth forecast of 6.5% in FY26 has not accounted for the 50% tariff and the below target inflation provides the space to boost demand, it said. Nomura expects a 25 basis-point rate cut each in October and December, taking the final rate to 5.00% by the end of 2025.

 

September is expected to witness a renewed weakness due to weaker new export orders as high tariffs set in, HSBC Global Investment Research said in a report. "If GST rate cuts take a few weeks, then some may postpone purchases during that time," the report said. While heightened global uncertainty may potentially impair corporate earnings and margins in the near term, fiscal support from the impending GST rationalisation is likely to incentivise a pickup in corporate sector leverage, Morgan Stanley said in a report.

 

Following the rise of the US' reciprocal tariffs on Indian goods to 50% on Wednesday, BMI – A Fitch Solutions Co., downgraded its forecast for GDP growth by 20 basis points and expects the economy to expand by 5.8% in FY26 and 5.4% in FY27. On the other hand, it sees the GST reform to come into effect by October, which will boost private consumption. "...we estimate the boost to private consumption to be around 0.2% of GDP in FY26 and FY27," BMI said.

 

Jefferies anticipates a big jump in earnings for two-wheeler and passenger car companies on the back of the proposed reforms in goods and services tax. The brokerage has upgraded its earnings per share estimates for TVS Motor, Hero MotoCorp, Maruti Suzuki India and Hyundai Motor India by 2-8% over a three-year period ending in 2027-28 (Apr-Mar), according to media reports. It has also raised volume expectations by 2-6%. The broking firm has upgraded Hero MotoCorp to 'hold' from 'underperform' and raised its target price on the stock by nearly 37% to INR 5,200.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.