Stock market today: 5 reasons why Sensex, Nifty are falling today

Sensex, Nifty: 5 reasons why stock market is falling today; 

Domestic benchmarks Sensex and Nifty fell on Friday after the US President’s trade counsellor Peter Navarro dashed hopes of any relief on tariff front, saying the “road to peace” in the Russia-Ukraine conflict runs through New Delhi. His comments came as $48.20 billion in Indian merchandise shipments faces the 50 per cent tariff from August 27.

While tariff concerns hurt sentiment, investors were also cautious ahead of the Fed Chair Jerome Powell’s speech at Jackson Hole today. The fact that the foreign equity outflows in August are now the highest since February 2025, there are concerns over India’s elative valuations vis-a-vis peers, and the recent earnings season was muted, made investors jittery. 

At 12.10 pm, the BSE Sensex was trading at 81,529.74, down 470.97 points or 0.57 per cent. Nifty stood at 24,935.95, down 147.80 points or 0.59 per cent.

Tariff concerns
Since President Trump’s imposition of a 50 per cent tariff rate on India — 25 per cent reciprocal tariff plus a 25 oer cet Russia penalty, the standoff between India and US has continued. 
Nomura siad the power balance has tilted towards the US, but India also has a large consumer market, is domestic-demand driven, provides opportunities for US in defense and energy sectors and acts as a strategic counterweight to China. 

“In our base case, we assume the 25 per cent reciprocal tariff remains in place through FY26, but the 25 per cent Russian penalty is effective only until November. As such, we now expect GDP growth at 6 per cent YoY in FY26, below our prior estimate of 6.2 per cent, after taking into account other policy offsets,” Nomura said.

Jackson Hole meet
On Powell’s Jackson Hole speech, Nomura said the FOMC minutes do not seem to have been framed to reflect a dovish tone and the market remains worried about Jackson Hole. 

In a note, it said the market sees a September Fed rate cut as almost a lock, but is evenly divided on the probability of another rate cut in October. The market does not hold excessive expectations for Jackson Hole and expects rate cuts this year in line with worsening economic data, it said.

FPI selloff 
Valuation concerns, led by muted growth, has led foreign investors dumped Rs 21,478 crore worth domestic equities in August so far, taking year-to-date outflows to Rs 1,17,120 crore. August outflows in fact are teh highest since February’s outflows of Rs 34,574 crore. 

“Given the backdrop of heightened volatility and mixed global signals, traders are advised to adopt a cautious “buy-on-dips” strategy. Booking partial profits on rallies and maintaining tight trailing stop-losses is recommended to manage risk. Fresh long positions should be considered only if the Nifty sustains above the 25,250 level. While the broader trend remains cautiously bullish, close monitoring of technical levels and global market cues will be crucial,” Choice Broking said.

Relative valuations
Data suggests relative allocations to India by emerging market funds fell sharply in July, while positioning in these other key markets rose meaningfully, the foreign brokerage said. EM funds’ relative allocation to India, on a trimmed-mean basis, dropped 1 percentage point month-on-month (MoM), with 41 of 45 funds in the sample cutting exposure. A total of 71 per cent of EM funds are now ‘Underweight’ on India as at end-July against 60 per cent previously, and India is now the largest ‘Underweight’ market in EM investors’ holdings.

Muted earnings 
Nifty ended Q1 earnings season with an 8 per cent YoY PAT growth. While this was higher than 4 per cent consensus growth, the earnings upgrade-to-downgrade ratio for the broader market remained unfavorable. Of the 21 key sectors from the BSE500 index, 16 reported profit growth in Q1. Heavyweights dominated during the quarter, with the top 10 companies, primarily from oil & gas, metals, and financials, contributing around 71 per cent to the incremental YoY earnings growth. About 212 Nifty-500 companies reported earnings growth of over 15 per cent YoY, while 183 companies reported a decline/loss during the quarter.