Nifty gives up 25,000, Sensex rises on dovish Fed Chair commentary, IT stocks rally

The week ahead has only four trading days on account of the Ganesh Chaturthi festival on August 27, 2025.

Equity benchmarks Nifty 50 and Sensex recorded some gains, kicking off the holiday-truncated trading week on a positive note on Monday, August 25. Dovish signals from the U.S. Federal Reserve Chair Jerome Powell raised hopes of a rate cut, fuelling investor optimism across the globe.

At close, the Sensex was up 329.06 points or 0.40 percent at 81,635.91, and the Nifty was up 97.65 points or 0.39 percent at 24,967.75. About 1769 shares advanced, 2149 shares declined, and 166 shares unchanged.

IT stocks outperformed today after US Federal Reserve Chair Jerome Powell, speaking at the Jackson Hole Symposium, signaled that rate cuts could begin as early as next month, with markets anticipating a 25 basis points reduction in the September meeting. The sector saw broad-based buying, further supported by positive brokerage commentary.

Notably, JPMorgan upgraded TCS to “overweight” from “neutral” and raised its price target to Rs 3,800 per share, providing a fresh boost to sentiment in a segment that has been grappling with sluggish growth and tariff concerns.

Sectoral trends on NSE were mixed. While Nifty IT led the gains with a sharp rise of 2.3 percent, followed by Nifty Realty and Nifty Metal, up 0.78 percent and 0.69 percent respectively. Nifty Pharma and Nifty Auto also posted modest gains. On the other hand, Nifty Media slipped 1.57 percent, while Nifty FMCG, PSU Bank and Energy indices traded marginally lower.

The frontlines outperformed the broader markets. The Nifty Midcap 100 gained 0.15 percent, while the Nifty Smallcap 100 inched up just 0.02 percent, showing subdued action compared to large-caps.

"With the Russia-Ukraine war lingering, the 25 percent penalty tariff on India for buying oil from Russia, is likely to come into effect from August 27th onwards. Even though 50 percent tariff is unlikely to significantly impact India’s growth, there will be adverse impact on India’s exports and loss of jobs in labour-intensive sectors like textiles, gems and jewellery and leather," noted VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

The sentimental impact of this development will be negative from the market perspective. FII selling, too, can impact the market, he added.  Domestic-consumption segments like financials, telecom, aviation, hotels , cement and segments of capital goods are better placed to withstand  the adverse headwinds.

On a technical front, the index would have the important 50EMA level near the 24,850 zone and, as mentioned earlier, has got the crucial and important support near the 24,500 zone, which needs to be sustained to keep the overall trend intact.

"On the upside, a decisive breach above the 25,000 zone shall change the sentiment once again; thereafter, expect a further upward move," said Vaishali Parekh, Vice President - Technical Research, PL Capital.

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