India Weekly Market Wrap (25–29 Aug 2025): Nifty and Bank Nifty Tumble Amid USD Surge & Tariff Fears
By CapitalKeeper | Weekly Wrap Up | Indian Equities | Market Moves That Matter
Explore India’s market week (Aug 25–29): Nifty down over 500 pts, Sensex falls, Rupee touches historic lows beyond ₹88, gold and silver rally, and crude wavers. Full weekly wrap plus forecast ahead.
1. Market Snapshot: Opening vs. Closing
| Index | Mon 25 Aug Open | Thu 29 Aug Close | Change |
|---|---|---|---|
| Nifty 50 | 24,949.15 | 24,426.85 | –522 pts (~–2.1%) |
| Bank Nifty | 55,147.75 | 53,655.65 | –1,492 pts (~–2.7%) |
| Sensex | 81,501.06 | 79,809.65 | –1,691 pts (~–2.1%) |
| Fin Nifty | 26,321.35 | 25,567.70 | –753 pts (~–2.9%) |
Markets ended the week sharply lower as mounting concerns over U.S. tariffs, equity outflows, and a plunging rupee weighed on investor sentiment.
2. What Moved the Markets
Tariff Shock & Market Panic
- The week was ruled by aggressive U.S. policy: additional 25% tariffs, pushing Indian export duties to a staggering 50%—the highest among any U.S. trading partner. ([turn0news27], [turn0news34])
- Indian stocks logged their worst session in three months on August 26 as fears of sustained economic impact took hold. ([turn0search5])
Rupee Breaks Historic Highs
- The rupee cratered past ₹88 to the dollar for the first time, breaching the 88.29 level before a minor pullback to around 88.12 after RBI intervention. ([turn0news20])
- Weakness extended to the yuan, with the rupee hitting a record low, though this may boost exporter competitiveness. ([turn0news24])
Capital Outflows & Reserves
- Foreign institutional investors pulled out nearly $2.7 billion in equities this week—marking the largest exit since February. ([turn0news34])
- The RBI’s reserves took a hit, dropping by $4.4 billion to $690.7 billion. ([turn0news23])
Macro Heartbeat: But Growth Still Chugs
- Despite knock-on effects from geopolitical stress, India’s GDP came in at a robust 7.8% YoY for Q1 FY26—its strongest in five quarters. ([turn0search3])
Safe Haven Inflows Lift Commodities
- Gold rose to a 3-week high and is poised for its best month since April, with domestic gold futures trading above ₹102,100 per 10g. Silver hit an all-time high above ₹117,000 per kg. ([turn0search10], [turn0search17])
3. Sector & Technical Analysis
- Banking & Financials: Bank Nifty’s steep drop signals sensitivity to macro risk. Nifty Banks was among the top underperformers.
- IT & Exports: Falling trade optimism hit nutrient-heavy sectors like IT, gems, textiles, and auto components.
- Defensive Plays: Commodity-linked sectors like pharma and chemicals may offer relative stability ahead.
- Nifty Support Zone: Immediate support lies around 24,300–24,400; resistance seen near 24,700–24,800.
4. Commodity & FX Overview
Commodities Snapshot
- Gold: Near ₹102,100/10g — rally fuelled by safe-haven demand.
- Silver: Soared past ₹117,000/kg, setting new lifetime highs.
Currency Landscape
- The INR fell to record lows, impacted by tariff-driven outflows and tight global liquidity. Intervention quelled further immediate damage. ([turn0news26])
- Despite slippage, economists note the rupee’s depreciation may aid export competitiveness, especially against stronger peers like China. ([turn0news24])
5. Summary Table: Key Metrics
| Metric | Week Overview |
|---|---|
| Equity Indices | Broad declines across Nifty, Sensex, Bank & Fin Nifty (~–2% to –3%) |
| Rupee (INR/USD) | Hit all-time low, briefly above ₹88 before RBI support |
| Forex Reserves | Fell by $4.4B to $690.7B |
| Capital Flows | $2.7B outflows from equities; DII support limited |
| Gold & Silver | Rally to multi-week and record highs, respectively |
| GDP Growth | Q1 GDP robust at 7.8%, showcasing domestic demand resilience |
6. Looking Ahead: Forecast for Week (1–5 Sep 2025)
Potential Catalysts
- U.S. Fed Signals & PCE Data: Expected to influence dollar strength and rate outlook.
- GST/Policy Relief: Speculation around GST rationalization may steer positive momentum. ([turn0news30])
- Domestic Economic Indicators: Q2 GDP projections, CPI, and industrial data to signal growth trajectory.
- Export–Emerging Market Stress: Additional tariff clarity or easing would soothe market nerves.
Trading Outlook
- Indices: Likely range-bound between 24,300–24,800. Breakouts could follow macro events.
- Rupee: Trading band near ₹88–89, with RBI intervention watch remaining critical.
- Commodities: Gold and silver may continue upward on global uncertainty; crude remains watchful.
7. Final Thoughts
The week ending August 29, 2025, was a test of India’s market mettle. Tariff shock triggered sharp equity declines, record rupee depreciation, and forced central bank reserves drawdowns. Yet, underlying GDP momentum and record commodity rallies highlight the complex mosaic of risk and resilience.
Moving into September, markets will await global cues and domestic policy clarity. Investors may pivot toward sectors with domestic demand traction and export potential, while defensive positioning will likely remain prudent.
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Ranjit Sahoo
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Ranjit Sahoo is the visionary behind CapitalKeeper.in, a leading platform for real-time market insights, technical analysis, and investment strategies. With a strong focus on Nifty, Bank Nifty, sector trends, and commodities, she delivers in-depth research that helps traders and investors make informed decisions.
Passionate about financial literacy, Ranjit blends technical precision with market storytelling, ensuring even complex concepts are accessible to readers of all levels. Her work covers pre-market analysis, intraday strategies, thematic investing, and long-term portfolio trends.
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