Markets Commentary August 1, 2025: Renewed concerns over potential U.S. tariff actions

Mumbai, August 1, 2025: Benchmark equity indices witnessed a sharp sell-off on Friday, mirroring global risk-off sentiment triggered by weak international cues, sustained FII (Foreign Institutional Investor) outflows, and renewed concerns over potential U.S. tariff actions. The Nifty50 remained range-bound during the early part of the session but succumbed to intense selling pressure in the latter half, breaching the 24,600 mark to close near the day’s low at 24,565.35, shedding 203 points or 0.82%.

The downside was exacerbated by the U.S. Federal Reserve’s persistently hawkish tone, with no signals of an imminent pivot toward rate cuts, thereby denting investor appetite for risk assets. Market participants also stayed on the sidelines ahead of key macroeconomic prints from the U.S. due later in the day, heightening uncertainty. On the sectoral front, the market breadth was largely negative. Nifty Pharma led the laggards with a steep 3.3% decline, followed by Nifty IT and Nifty Metal, both retreating over 1.5%. Nifty Realty and Nifty Auto also faced headwinds, correcting 1.8% and 1.04%, respectively. Bucking the broader trend, Nifty FMCG emerged as the lone gainer, advancing 0.69%, buoyed by defensive buying amid heightened volatility.

Nifty Outlook

The index formed a sizable bear candle with a lower high and lower low signaling continuation of the corrective decline. Volatility is anticipated to remain elevated in coming week driven by key macro triggers including the progress of US-India tariff decision and the RBI rate decision. Index has key support around 24,500–24,400 levels being the confluence of the prior swing low, the 100-day EMA and key retracement level of the previous up move (23935-25669). Index holding above the support area will lead to consolidation in the range of 24,400-25,000. While a breach below 24,400 will open downside towards 24,200 levels in the coming week

Bank Nifty Outlook

Bank Nifty formed a bear candle which remained enclosed inside previous session price range signaling consolidation with downward bias. Index has key support around 55,500–55,000 region being the confluence of the 100-day EMA and key Fibonacci retracement levels of the prior up move. On the higher side key resistance is placed at 56,300-56,500 levels being the lower band of the recent breakdown area. Only a move above the same will signal a pause in the downtrend. Overall, the index is likely to consolidate in the range of 55,000-56,400 in the coming sessions.

Attributed to Bajaj Brokering Research