Why Are Markets Falling? Sensex Down 640 Points, Nifty Below 24,800 as US Tariff Deadline Weighs on Investors

Indian equity benchmark indices, the Sensex and Nifty, started the session in red on Tuesday, August 26, 2025, a day of ahead of US tariff deadline for implementing a second tranche of 25 per cent tariffs.

On the opening bell, Sensex was down 570.16 points down at 81065.80 level, while Nifty 50 fell 168 points to 24798.90 level. 

Further declining, the 30-share BSE Sensex was down 672.81 points at 80,963.09 level; while the Nifty fell began lower by 192.20 points at 24,775.55 level at t 9:49 am.

This comes soon after the US Department of Homeland Security on Tuesday notified India about the plans to increase tariffs to 50 per cent on Indian goods, signalling that Washington plans to move with the higher tariffs after talks to broker a ceasefire deal between Russia and Ukraine appeared to be stalled. 

The notice stated that Indian goods that entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM eastern daylight time on August 27, 2025 would attract heightened levies.

In today's trading session, almost all sectors are in the red due to tariff hike fears, however buying was seen in the FMCG sector. Meanwhile, key verticals such as Pharma, IT and realty sectors were under the most pressure. The Nifty Pharma index fell down by above 1 per cent, Nifty Healthcare fell 1.49 per cent and Nifty Realty declined 1.03 per cent.

Among the selec few gainers today, Hindustan Unilever led with a rise of 0.57 per cent, Infosys came in second gaining 0.27 per cent, and Tata Consultancy Services climbed 0.20 per cent, but the positive momentum was limited to just these three stocks. 

On the losing end, Sun Pharma witnessed the biggest decline, crashing 3.63 per cent. Adani Ports fell 1.59 per cent, while Power Grid Corporation dropped 1.53 per cent. Bharat Electronics Limited lost 1.48 per cent and Tata Steel declined 1.47 per cent.

Sugandha Sachdeva, Founder of SS WealthStreet, said, “Indian markets have witnessed a steep decline after the recovery in the previous session. It's majorly because markets are concerned about the impact of tariffs on the Indian economy. President Trump had previously announced 25% additional tariffs on Indian imports which are likely to come into effect on 27th of August.”

“As of now, the negotiations have not changed the tariff slab. Plus, President Trump has again maintained these additional 25% tariffs on Indian goods, making the total effective rate as 50%. So, this is likely to impact auto, textiles and leather goods which are primarily exported to US,” she said.

"As of now, Nifty has breached the recent support of 24,800 mark and looks likely to head lower towards 24,650 to 24,600 on levels. Apart from that, crude oil prices have also witnessed a sharp uptick in the previous trading session as Ukraine has attacked Russia's oil infrastructure which has raised concerns about oil suppliers from the key oil exporting region. So, this is also leading to some pressure on the domestic equities and has also hurt the risk sentiments in the markets," she added.