Indian Stock Market Outlook for August 29, 2025: Tariff Tensions Weigh on Sentiment Amid Technical Volatility

“Indian Stock Market Outlook for August 29, 2025: Tariff Tensions Weigh on Sentiment Amid Technical Volatility

 

Market Recap: What Unfolded on August 28, 2025

On Thursday, August 28, 2025, Indian equity markets ended sharply lower:

• The BSE Sensex fell by 705.97 points (–0.87%), closing at 80,080.57, while the Nifty 50 declined 211.15 points (–0.85%) to settle at 24,500.90. The midcap and smallcap indices also slipped, by around 1% each.

• The downturn followed the enforcement of 50% U.S. tariffs on Indian exports, which rattled investor sentiment significantly.

• Sectorally, only consumer durables ended positively. Meanwhile, banks, IT, realty, FMCG, and telecom indices dropped approximately 1% each.

• Among individual stocks, the biggest draggers included Shriram Finance, HCL Technologies, TCS, Power Grid, and Infosys, while Titan, L&T, Coal India, Asian Paints, and Hero MotoCorp managed modest gains.

Technical Outlook for August 29

A detailed technical analysis provides clear levels to watch for Nifty, Bank Nifty, and Sensex:

Nifty 50

• No-trading zone: 24,475 to 24,600

• Support levels: Immediate at 24,475; deeper at 24,400, 24,280, 24,124

• Resistance levels: Immediate at 24,600; further at 24,725, 24,841, 24,933

Scenarios:

• Bullish breakout above 24,600 could trigger rallies toward 24,725 → 24,841 → 24,933.

• Bearish breakdown below 24,475 may extend falls toward 24,400 → 24,280 → 24,124.

• A false breakout within the zone may spawn short-covering or whipsaw moves.

Bank Nifty

• No-trading zone: 53,771 to 54,050

• Support levels: 53,771; further at 53,678, 53,484, 53,300

• Resistances: Immediate at 54,050; then 54,350, 54,640, 54,900

Sensex

• No-trading zone: 80,000 to 80,353

• Support levels: 80,000; deeper at 79,800, 79,660, 79,343, 79,076

• Resistance levels: 80,353; then 80,655, 80,829, 81,000

Outlook: With heavy selling, U.S. tariff fears, and expiry-related volatility, trading is anticipated to be cautiously bearish to sideways.

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Broader Sentiment and Strategy

Expert Commentary

• Sunil Singhania (Abakkus Asset Manager LLP) urges investors to treat corrections as entry points, remain long-term focused, and avoid IPO-driven FOMO. He notes that any tariff relief could spark a strong rebound.

• Prashant Jain (3P Investment Managers) believes the market will stay range-bound near term, with largecaps offering solid medium- to long-term risk-reward, and tariff risks being contained.

• Samir Arora, a seasoned investor, stresses that despite recent FPI outflows, international investors remain constructive on India’s long-term story, driven by strong economic fundamentals.

• Rahul Bajoria sees signs of resilience in India’s macroeconomic fundamentals, pointing out that global uncertainty—not the U.S. tariffs per se—is the main factor currently influencing sentiment.

• Christopher Wood (Jefferies) at the ET World Leaders Forum called India the most compelling long-term equity story globally, defending its current valuation premium as justified.

FII Trends & IPO Market Dynamics

• FIIs have offloaded approximately ₹1.16 lakh crore (~USD13.23 billion) from Indian equities in 2025, especially from IT, FMCG, and Power sectors. Some inflows remain in telecom and services, with strategic plays in small- and mid-cap segments.

• SME IPOs have notably underperformed—30 NSE SME listings have tumbled up to –58%, while only 9 mainboard deals trade below their issue prices.

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Triggers & External Risks

U.S.–India Trade Tensions

• The surge to 50% U.S. tariffs on August 27, 2025, forms a core concern, with wide-reaching impacts across exports and corporate sentiment

Macroeconomic and Domestic Resilience

• Despite pressures, India’s economy remains robust—GDP growth for FY 25 expected between 6.4–6.7%, and inflation cooling to 4.2–4.8%

Other Market-Supportive Factors

• Markets earlier were buoyed by expectations of Fed rate cuts, GST reforms, and a healthy monsoon, though these positives are now overshadowed by escalating trade friction

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Trading & Investment Playbook for August 29

Intraday & Short-Term Traders

• Key zones to watch closely:

  • Nifty: 24,475–24,600

  • Bank Nifty: 53,771–54,050

  • Sensex: 80,000–80,353

• Enter breaks with discipline, using strict stop-losses.

• Avoid staying active in no-trading zones to limit whipsaw risk.

Medium- & Long-Term Investors

• Corrections could present buying opportunities—especially in large-cap stocks with strong fundamentals.

• Maintain a selective approach: focus on sectors with defensive pathways or domestic resilience.

• Watch for shifts in FII flows and tariff developments—a pivot could help manage exposures.

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Summary – Market Narrative on August 29

• Expect a cautiously bearish to sideways opening, with technical levels determining intraday direction.

• Tariff fears, FII selling, and SME IPO struggles weigh heavily, yet India’s economic fundamentals retain strength.

• Experts encourage disciplined positioning, favoring long-term large-cap exposure while respecting present volatility.

• Traders should await clear breakout or breakdown confirmation before initiating trades, emphasizing risk control.