Nifty tests 25,500, Sensex opens flat as tariff threats lose steam, volatility continues to cool

In the previous session, Nifty and Sensex ended mildly higher on last hour buying.

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26 Aug, 2025 12:21

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Dalal Street saw yet another quiet start to trade as investors continued to shrug off U.S. President Donald Trump's tariff threats on Wednesday, July 9.

At 09:20 a.m., the Sensex was down 166.05 points or 0.20 percent at 83,546.46, and the Nifty was down 41.85 points or 0.16 percent at 25,480.65. About 1504 shares advanced, 932 shares declined, and 145 shares unchanged.

The Nifty Midcap 100 also traded flat, while investors bought smallcap stocks, leading the Nifty Smallcap 100 to rise almost 0.3 percent. On the sectoral front, indices were mixed. IT, realty, and banking stocks were in the red, while on the flip side, pharma, FMCG, and media stocks traded with gains.

Investors awaiting an India-U.S. trade deal were left disappointed as no signs of a deal were forthcoming. There is some hope that the agreement may be signed soon, though the deadline has been pushed to July 31, noted experts.

Further, Trump's rhetoric of an additional 10 percent tariff on BRICS nations, including India, was brushed off by the markets, as details of the trade deal were awaited. “If India is in BRICS, then they’ll have to pay. BRICS was created to damage our economy and remove the dollar as the global standard. If they want to go down that path, I can respond too. So, any country in BRICS will face a 10 per cent tariff," he had said.

According to experts, the recent stability, despite lingering caution ahead of the trade deal announcement and the upcoming earnings season, suggests that the bulls remain in control and anticipate a resumption of the uptrend.

"However, participants should avoid complacency and maintain their focus on stock selection, as sectoral participation continues on a rotational basis," suggested Ajit Mishra – SVP, Research, Religare Broking.

Foreign Portfolio Investors (FPIs) net sold Rs 26 crore in Indian equities while domestic institutional investors (DIIs) net bought Rs 1,367 crore, according to provisional data on NSE.

The S&P 500 ended the choppy session slightly lower as investors waited for clarity on U.S. trade policy after President Donald Trump's latest tariff threats dampened hopes around talks with some trade partners.

The Dow Jones Industrial Average fell 165.60 points, or 0.37 percent, to 44,240.76, the S&P 500 lost 4.46 points, or 0.07 percent, to 6,225.52 and the Nasdaq Composite gained 5.95 points, or 0.03 percent, to 20,418.46.

Asian shares opened cautiously as investors held back from taking risky bets after President Donald Trump ruled out extending his August deadline. Copper futures fell on Trump’s tariff threat.

As long as the index holds above the previous session's low (25,424.15), the bullish trend is expected to strengthen. Although the breakout has occurred, a sustained move above the 25,500 mark will be crucial for confirming directional bias in tomorrow’s session. Such a move could trigger short-covering, forcing bears to unwind their positions.

"On the downside, the 25,300–25,400 range has emerged as a critical support zone, from where the index rebounded strongly and found support near the 10-day EMA—suggesting a robust intraday reversal. A strong intraday close above the 25,600 mark with follow-through buying could trigger renewed bullish momentum and open the path to the psychological level of 26,000," Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities noted.

In the derivatives segment, open interest (OI) data showed the highest Call OI at the 25,600 strike, followed by 25,700, suggesting a potential resistance zone. "On the Put side, the highest OI was seen at the 25,500 strike, followed by 25,400, indicating strong support levels. This OI setup suggests that the 25,400–25,600 zone will be crucial for Nifty's next directional move,"  said Hardik Matalia, Derivative Analyst, Choice Broking.