Sensex shrugs off tariff shocker, Nifty trims losses on monthly expiry; FMCG stocks outperform

The India VIX index ticked up 4 percent on the monthly expiry.

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26 Aug, 2025 12:21

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Dalal Street shrugged off tariff concerns, as investors expect that trade talks with the U.S. will continue and the final tariff rate will be lower than 25 percent. The benchmarks staged a smart recovery in the late morning, trimming major losses.

At 11:46 a.m., the Sensex was down 149.69 points or 0.18 percent at 81,332.17, and the Nifty was down 35.40 points or 0.14 percent at 24,819.65. About 1278 shares advanced, 2048 shares declined, and 130 shares were unchanged.

The sectoral indices were largely in the red, barring the FMCG index, that defied the market sentiment to soar 1.3 percent, supported by defensive buying amid broader market volatility and strong commentary from heavy-weight Hindustan Unilever.

The Nifty Pharma and Nifty IT were sharply in the red in trade, falling 0.85 percent and 0.57 percent, respectively. Persistent concerns over global demand following Trump's tariffs and margin pressures continue to weigh on these export-heavy sectors.

The Nifty Realty index dropped 0.92 percent, while Nifty PSU Bank and Nifty Energy also remained under pressure, slipping 0.35 percent and 0.55 percent, respectively. On the flip side, Nifty Auto and Nifty Metal traded almost flat.

The broader markets remained under pressure. The Nifty Midcap 100 was down nearly one percent, while its smallcap peer was down half a percent.

Speaking on the tariffs' impact on the markets, Vaqarjaved Khan, CFA - Sr. Fundamental Analyst, Angel One said, "Export oriented stocks can underperform in the near term. Investor sentiment till trade talks turn positive from here is expected to remain cautious. FPIs may adapt a wait and watch stance till further clarity comes in or their stance may lead towards a sector rotation approach."

He added that investors, both domestic and foreign, are expected to shift their focus towards domestic growth, consumption, Infrastructure and financial companies that rely less on exports.

Amnish Aggarwal, Director - Research, Institutional Research, PL Capital added, "We don’t rule out some counter measures by India on US exports and the path to a trade deal is not easy given sticky issues like agriculture, dairy and defence. We expect increase in uncertainty and market volatility in the near term. We believe companies which have higher US exports might see increased volatility."

"Although current earnings season has not shown any meaningful recovery in domestic demand, hops of festival season demand revival will increase interest in domestic stories for the time being. Domestic consumption, hospitals, select consumer, Infra, capital Goods, AMC and private banks will act as a defensive hedge during these volatile times," said Aggarwal.