Stock market news: The Indian stock markets experienced a decline for the third consecutive session on Friday, as investors awaited positive developments following the US’s decision to impose a 50% tariff on Indian products.
By the close of trading today, the Sensex dropped by 270.92 points, which is a 0.34 percent decrease, ending at 79,809.65, while the Nifty 50 closed at 24,426.85, down 4.05 points or 0.30 percent.
Experts suggest that the upcoming week poses a difficult scenario for Indian equities as the markets face considerable challenges stemming from the newly instituted 50% US tariffs on Indian goods, effective August 27.
Foreign institutional investors have switched to net selling, while domestic institutional investors have provided substantial backing.
The market’s future will largely hinge on gaining clarity regarding tariff negotiations and forthcoming domestic policy actions, which may include discussions on potential GST rationalization.
Market Outlook by Dharmesh Shah, Vice President, ICICI Securities
Equity benchmark extended the decline for the second consecutive week, closing below the prior week’s low, weighed down by tariff concerns, persistent FII’s outflows, and rupee depreciation. Nifty 50 dropped 1.75% to settle the week on a negative note at 24,427. Nifty midcap and small cap relatively underperformed the benchmark by declining >3%, each. Sectorally, Barring FMCG all indices closed in red, where, Realty, PSU bank, and financial services were the major laggards. The weekly price action formed a bear candle carrying lower-high-low, indicating extended correction.
Key point to highlight is that, nifty prolonged its lower-low-high structure for the eight-weeks, except for a brief rebound in mid-August, and breached below the 100-day EMA, however past six sessions >700 points decline has hauled daily stochastic oscillator in oversold territory (placed at 3), indicating possibility of minor pullback cannot be ruled out. Hence, traders should refrain from creating aggressive short position at current juncture. However, to pause the current downward momentum, a decisive close above previous sessions high is a pre-requisite and would be the first indication of potential pullback.
Going ahead, strong support is placed in the vicinity of 24,000-24,200 being 200 days EMA, 38.2% retracement of entire up move seen off April lows, coincided with the previous gap zone of 24,378–24,164, which indicates a high probability of demand emergence at lower levels and continuation of the primary uptrend and a move towards 25,000 which will act as immediate resistance.
Structurally, Since April 2025, there has been five instances of intermediate corrections on an average in the range of 3–4% within the ongoing bull market, each followed by a gradual recovery. We expect index to maintain the same rhythm as the current corrective phase has approached price wise maturity as it has corrected ~3%.
On the market breadth front the % of stocks above 50 days EMA has entered in the oversold zone of 25-30 and currently placed at 27 indicating the corrective phase approaching exhaustion and a potential rebound could emerge in the near term.
On the broader market front, both Nifty Midcap and small cap is making lower-high-low formation indicating corrective bias. However the only silver lining, it is currently trading in the vicinity of 52-week EMA which has been held since April 2025 offering an incremental buying opportunity, hence focus should be on accumulating quality stocks backed by strong earnings, especially those poised to benefit from next-generation GST reforms expected after the GST Council meeting in the coming week and upcoming festive season as we believe strong support threshold is at 24,000-24,200 zone.
Key monitorable:
a) Development of Bilateral trade deal negotiations.
c) U.S. Dollar index continues to trade below the past two years breakdown area of 100, indicating corrective bias while crude oil closed the week on a flat note.
Stocks To Buy This Week – Dharmesh Shah
Dharmesh Shah of ICICI Securities recommends buying JK Lakshmi shares this week.
Buy JK Lakshmi shares in the range of ₹900-920. He has JK Lakshmi share price target of ₹1,042 with a stop loss of ₹858.
Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 29/08/2025 or have no other financial interest and do not have any material conflict of interest.
The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
