US tariffs, FII selling among reasons why Sensex, Nifty are falling today

Indian stock markets tumbled on August 26, 2025, as US tariff threats, weak rupee, and heavy FPI selling dragged Sensex 781 points and Nifty below 24,750 intraday

Stock market crash today: Indian stock markets witnessed heavy selling pressure on Tuesday, August 26, 2025, as Dalal Street investors resorted to profit booking ahead of the imposition of the US import tariffs.

 

BSE Sensex index tumbled 781 points, or 0.95 per cent, intraday to hit a low of 80,947 levels. On the NSE, the Nifty50 index broke the 24,750-mark as it hit a low of 24,742. The index fell 227 points intraday.

 

In the broader markets, the Nifty MidCap index, and the Nifty SmallCap index cracked up to 2 per cent.  FOLLOW LATEST STOCK MARKET UPDATES LIVE 

Top gainers, losers today:

Thirty nine of the 50 Nifty stocks were trading lower on the National Stock Exchange (NSE) today. Shares of Shriram Finance, Sun Pharma, Dr Reddy’s Labs, Coal India, Power Grid, Tata Steel, Trent, HDFC Bank, Bajaj Finserv, IndusInd Bank, Bharat Electronics, Hindalco, ICICI Bank, and HDFC Life were the top losers on the Nifty.

 

On the upside, however, Eicher Motors, Hero MotoCorp, Nestle India, HUL, Bajaj Auto, and Maruti Suzuki were some of the notable Nifty gainers today.

 

Why are markets falling today? Key reasons for Sensex, Nifty crash on August 26, 2025:

 

US to impose additional tariffs on India:

Ahead of the August 27 deadline to impose 25 per cent additional tariffs on India imports, US President Donald Trump’s government announced a timeline to impose 50 per cent (total) tariffs on Indian goods. READ MORE

 

The Department of Homeland Security, on Monday (local time), released a draft notice saying that the Trump administration will move forward with its plan to slap additional tariffs on India.

 

"The increased levies would apply to Indian products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 27, 2025," the notice said.

 

Notably, while reciprocal tariffs on India stand at 25 per cent, US has decided to "penalise" India for buying oil from Russia despite sanctions, at lower rates. Given this, the Trump administration has decided to impose additional 25 per cent tariffs on Indian goods.

Global markets fall; Trump fires Fed Governor Lisa Cook:

In yet another attempt to gain greater influence over the central bank, U S President Donald Trump removed Federal Reserve Governor Lisa Cook Monday night.

 

In a post on Truth Social, Trump accused Cook of being involved in mortgage fraud. The allegation stemmed from a referral to Attorney General Pam Bondi by Federal Housing Finance Agency Director Bill Pulte, who claimed Cook falsified bank records to secure better loan terms. READ MORE

 

This triggered selling across Asian and US stocks.

 

Japan's Nikkei is down 0.9 per cent at the time of writing this report, Australia's ASX200 0.5 per cent, and Hong Kong's Hang Seng 0.17 per cent.

 

Dow Jones Industrial Average futures, too, fell 64 points, or 0.14 per cent, while S&P 500 futures and Nasdaq 100 futures were down 0.14 per cent and 0.22 per cent, respectively.

 

Trump threatens more tariffs:

Continuing with his tariff threats, US President Donald Trump said on Monday that his government will impose new tariffs and restrict technology exports on countries that target American technology firms with digital taxes or related regulations, while giving "a complete pass" to Chinese technology giants.

 

" put all countries with digital taxes, legislation, rules, or regulations, on notice that unless these discriminatory actions are removed, I will impose substantial additional tariffs on that country's exports to the USA., and institute export restrictions on our highly protected technology and chips," Trump said.

 

Weakness in Rupee:

India rupee declined for a fifth straight session on Tuesday, opening 14 paise lower at 87.72 against the US dollar.

 

Further, the Rupee has slipped 2.6 per cent in the current financial year and 2.40 per cent in calendar year 2025 so far.

 

A decline in rupee value makes Indian investments less attractive for foreign investors, forcing them to sell Indian stocks. 

FPI selling:

Notably, foreign institutional investors (FIIs) sold Indian stocks worth ₹2,466.24 crore on Monday, after selling stocks worth ₹1,622.52 crore on last Friday (August 22).

 

FIIs have net sold Indian stocks worth ₹28,217.26 crore, so far, in August 2025. This coincides with the Rupee’s 0.12 per cent decline, so far, during the month.

 

FIIs also sold stocks worth ₹47,666.68 crore in July 2025, keeping the upside capped in Indian stock markets.

Technical levels:

According to analysts at Geojit Investments Ltd, the Nifty's inability to close above 25,000-25,033 zone, on Monday, shows that buyers are not keen on chasing prices higher.

 

"This leaves room for dips. Upswing possibility could diminish if the Nifty slips below 24,870. That said, only a direct fall below the 24,740 level will initiate downside plays," said Anand James, chief market strategist at the brokerage.