Sensex falls 700 pts, Nifty below 25k: Why are stock markets falling today?

The BSE Sensex tumbled 571 points in the intraday to hit a low of 81,429.33. The NSE Nifty50 also slipped below the 25,000 mark

Why markets are falling today: Indian equity benchmark indices, Sensex and Nifty, were trading sharply lower on Friday, August 22, snapping their six day gaining streak driven by optimism over Goods and Services Tax (GST) reforms. The decline came as investors turned cautious ahead of Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium later in the day.   The BSE Sensex tumbled 709  points in the intraday to hit a low of 81,292. The NSE Nifty50 also slipped below the 24,900 mark in the intraday to hit a low of 24,859, down 225 points from the previous day's close of 25,084.

 

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At close, Sensex settled at 81,307 levels, down 694 points or 0.85 per cent, while Nifty 50 was down by 214 points or 0.85 per cent to 24,870 levels.    CATCH LATEST STOCK MARKET UPDATES TODAY LIVE 

Twenty-five of the 30 Sensex constituents were trading in red, including HCL Tech, HDFC Bank, Asian Paints, ITC, Tech Mahindra, TCS, and ICICI Bank down up to 2 per cent.

 

However, in the broader market, the NSE MidCap 100 index was trading flat, and the Nifty SmallCap 100 index was down 0.09 per cent. 

 

Among the sectoral indices, Nifty Metal, PSU Bank, and Private Bank fell over 1 per cent each. Nifty Bank, Financial Services, IT, Energy, Auto, FMCG, Realty, and Oil & Gas were also trading lower. On the contrary, Nifty Pharma, Consumer Durables, Media and Healthcare were trading higher.  

Here are the key reasons behind Sensex, Nifty fall today, August 22:

Caution ahead of Fed chair's Jackson Hole Speech: Globally, investors have turned cautious ahead of US Federal Reserve Chairman Jerome Powell's commentary at the Jackson Hole Symposium. Investors are looking for guidance on US Fed's upcoming monetary policy moves. US markets settled lower on Thursday as investors feared potentially hawkish comments by the Federal Reserve. Asian markets were also trading on a mixed note.

 

Trump tariff deadline approaches: Concerns over the upcoming 25 per cent US tariffs, set to take effect on August 27, added to market volatility. VK Vijayakumar, chief investment strategist at Geojit Investments, said, the headwinds for the market from  Trump tariffs will weigh on markets constraining the rally of the last six days. "If the penal tariff of 25 per cent kicks in on August, and this appears likely, the impact on India’s growth will be not be 20 to 30 basis points (bps) estimated with 25 per cent reciprocal tariffs, but more. The market will have to discount that," he added.

 

Selling in heavyweight stocks: In addition, selling in heavyweights like HDFC Bank, HCL Tech, TCS, ITC and Tech Mahindra was also pulling the leading indices down. Forty-one out of 50 Nifty50 constituents were trading in red. Hero MotoCorp, HCL Tech, HDFC Bank, Kotak Mahindra Bank, TCS, and ITC were among the top laggards down over 1 per cent each.

Technical outlook

From a technical perspective, the Nifty, in the previous session, opened flat and traded in a narrow range, reflecting indecision among participants. "A decisive move above 25,150 could open the door for an upside toward 25,250 and 25,500, while immediate supports are placed at 25,000 and 24,850 — levels considered attractive for fresh long positions," Amruta Shinde, technical and derivative analyst at Choice Equity Broking. 

 

Shinde suggests traders to adopt a cautious “buy-on-dips” strategy given the backdrop of heightened volatility and mixed global signals. "Booking partial profits on rallies and maintaining tight trailing stop-losses is recommended to manage risk. Fresh long positions should be considered only if the Nifty sustains above the 25,250 level. While the broader trend remains cautiously bullish, close monitoring of technical levels and global market cues will be crucial," she added.