Indian benchmark indices Sensex and Nifty extended their decline in the afternoon session on August 26, coinciding with the BSE contracts expiry and just ahead of the looming 25 percent additional tariff deadline. The broader market mood was largely negative as most sectors traded in the red, with metals, pharma, and realty bearing the brunt of the selloff.
Around noon, the Sensex had dropped 558.59 points, or 0.68 percent, to 81,077.32, while the Nifty slipped 169.35 points, or 0.68 percent, to 24,798.40. Market breadth remained weak, with 1,081 shares advancing, 2,453 shares declining, and 126 shares unchanged.
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The broader markets continued to underperform for the second straight day this week, as both the midcap and smallcap indices slid by about 1 percent each. Meanwhile, India VIX edged higher by 2 percent, reflecting elevated volatility during this monthly expiry week.
From a sectoral perspective, Nifty FMCG grabbed attention amid renewed optimism around GST rationalisation, which is expected to revive consumption by streamlining taxes into two slab rates. The Nifty Auto index traded with a flat to mildly positive bias, which was evident in the Nifty’s top gainers’ list, dominated by Hindustan Unilever, Nestlé, Eicher Motors, Maruti Suzuki, and Tata Consumer Products.
In contrast, Sun Pharma dragged the index lower, emerging as the top Nifty laggard after Bernstein downgraded the stock on account of risks to consensus earnings and stretched valuations. The brokerage issued an ‘underperform’ rating with a revised target price of Rs 1,570 per share, marking a 9 percent cut from its earlier estimate.
Looking ahead, analysts at ICICI Securities observed that the market is attempting to digest multiple headwinds, including tariff uncertainties, geopolitical concerns, and persistent foreign institutional investor (FII) outflows.
Analysts pointed out that the Nifty has consistently held the 24,500 mark on weekly closing basis for over three months, signaling a strong higher base formation that could support the next leg of the upmove.
Meanwhile, Vaishali Parekh, Vice President - Technical Research at PL Capital, noted that Nifty’s immediate support is placed at 24,800, while resistance lies around 25,200 levels for the day.
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