1 August, 2025 : Sensex-Nifty 0.80% down; Pharma, IT and Metal push Markets to Big Losses

Indian equity markets had a mixed trading day on Friday, 1st of August, 2025, as rising global trade tensions and new tariffs from the US continue to overshadow investors' sentiments. The two benchmark indices, the BSE Sensex and the NSE Nifty 50, closed the day in the red, following losses in Asian markets.

The Sensex settled at 80,599.91, losing 585 points (0.72%), and the Nifty 50 lost 203 points to settle at 24,565.35, falling below the important 24,600 mark. The day was dominated by widespread selling, with the advance-decline ratio in favour of decliners: 1,391 stocks rose against 2,575 that fell on the BSE.

Key Drivers of Market Movement

The main drag on local equities was the news of US President Donald Trump introducing a new tariff regime, though the imposition of 25% tariffs on Indian exports postpones to be effective from August 7, 2025. This was one in a series of escalations against 69 nations that spooked markets and unleashed a risk-off mood in investors. Indian markets thus broke the previous day's weak close and carried on with the sell-off, shattering a short-term recovery trend.

Wider market indices also saw closed in red, with the Nifty MidCap index falling 0.96% and the Nifty SmallCap declining 1.19%. Volatility, as indicated by India VIX, increased 3%, reflecting the uncertainty that exists in the market.

Sector and Stock Highlights

• Pharma and IT: Of sectoral indices, the worst performer was Nifty Pharma, which fell 3.4%, followed by the Nifty IT index down 1.54%. Sun Pharma, Dr Reddy's Labs, and Cipla were the major drags, indicating worries on the demand side globally and pressures on prices.
• Metal: Nifty Metal loses almost 2%, trading just above 9100 levels. Vedanta limited traded in mild red, losing 0.28%, LMP being Rs 424.45.
• FMCG: Nifty FMCG traded against the tide of the negative trend, gaining 0.82% as investors looked for defensive plays. HUL and ITC were among the Sensex's best performers, followed by Asian Paints, Trent, and Kotak Mahindra Bank.
• Auto Stocks: In autos, two-wheeler leaders TVS Motor and Eicher Motors led the pack, rallying up to 4% despite the muted broader market.

Market Breadth and Flows

The smallcap and midcap space saw deeper cuts compared to large caps, with the BSE Smallcap and Midcap indices falling by about 0.5% to 1.2%. Foreign portfolio investors continued to sell on Thursday, with net outflows of more than ₹5,500 crore, while domestic institutions took some pressure off with net purchases of ₹6,373 crore.

Outlook

Analysts are cautious, pointing to increased volatility on account of geopolitical events and suggest holding hedged positions. Technical analysts anticipate the Nifty to consolidate between 24,500–25,000 in the next few sessions, with resistance coming in around 25,250. Additional triggers may come from India's corporate earnings season, bulk IPO listings next week, and development on global trade fronts.

Briefly, Indian equities were shaken by global macro uncertainty and foreign selling, precipitating a broad-based retreat across sectors, with only a handful of defensives providing some relief.