Markets extended their losing streak for the third consecutive session on Friday, with benchmark indices falling sharply as the rupee plummeted to an all-time low of ₹88.31 against the US dollar amid escalating trade tensions between India and the United States.

The BSE Sensex tanked 270.92 points or 0.34 per cent to close at 79,809.65, while the Nifty 50 fell 74.05 points or 0.30 per cent to settle at 24,426.85. The markets opened flat with Sensex at 80,010.83 and Nifty at 24,466.70, but selling pressure intensified during the final hour of trade, dragging indices to near their day’s lows.

“Investor sentiment remained cautious as markets attempted to digest the full impact of the US tariff. The persistence of this issue is likely to heighten the future competitiveness of India’s exports in some areas,” said Vinod Nair, Head of Research at Geojit Investments Limited. “While generally the pressure is also likely to weigh on INR, driving it to depreciation.”

The currency crisis deepened as the rupee breached the psychological ₹88 mark for the first time in history. “The rupee hit an all-time low of 88.20, falling by another 0.60 (0.70 per cent), as pressure mounted after the US implemented tariffs on Indian products, raising concerns over a widening fiscal deficit,” explained Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities. “Sentiment remains weak, and the rupee is expected to trade within a range of 87.65–88.45.”

Sectoral performance remained mixed, with realty and oil & gas sectors leading the decline. Only FMCG, media and consumer durables managed modest gains. The Nifty FMCG index gained 1 per cent on optimism surrounding the upcoming GST Council meeting scheduled for September 3-4.

Among individual stocks, ITC emerged as the top gainer, rising 2.15 per cent to ₹409.50, followed by Shriram Finance which gained 1.79 per cent to ₹581.90. Bharat Electronics Limited (BEL) advanced 1.53 per cent to ₹369.40, while Larsen & Toubro climbed 1.26 per cent to ₹3,605 and Asian Paints gained 1.25 per cent to ₹2,520.

On the losing side, Mahindra & Mahindra suffered the biggest decline, falling 2.89 per cent to ₹3,200. Reliance Industries dropped 2.16 per cent to ₹1,356, while Infosys declined 2.07 per cent to ₹1,469. Apollo Hospitals fell 1.51 per cent to ₹7,611, and Adani Enterprises declined 1.20 per cent to ₹2,247.90.

“Indian equities continued to struggle on Friday as the Nifty opened flat but quickly slipped back into bearish territory, extending the week’s correction to nearly 2 per cent,” noted Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth. “The continuous decline has sparked nervousness among investors, with many portfolios now underwater.”

The broader market witnessed significant weakness, with 4,043 stocks traded on BSE showing 2,283 advances against 1,551 declines. The Nifty Midcap 100 fell 0.57 per cent to 55,727.40, while the Nifty Bank declined 0.31 per cent to 53,655.65. A total of 83 stocks hit 52-week highs while 91 touched 52-week lows.

Foreign institutional investors continued their selling spree, with net outflows of ₹38,590.26 crore recorded in August so far. “FIIs continued to be net cash sellers to the tune of ₹38,590.26 crore as of Aug ‘25,” confirmed Shrikant Chouhan, Head Equity Research at Kotak Securities.

Technical analysts remained bearish on the market outlook. “The markets remained under pressure through the week, with persistent selling seen at higher levels. The Nifty index has slipped below all key short-term moving averages, while momentum indicators have turned negative on both daily and weekly charts,” said Nilesh Jain, Head – Technical and Derivatives Research Analyst at Centrum Broking Ltd.

Commodities also reflected the market turmoil, with gold prices rising due to rupee weakness. “Gold prices stayed positive as the market reacted to a falling rupee, with COMEX gold trading in a tight yet volatile range near $3405,” said Trivedi. “However, rupee weakness provided MCX gold with a push of nearly ₹500, lifting prices to ₹1,02,600.”

The market’s performance this week highlighted the challenges facing Indian equities amid global trade uncertainties. “The sensex ended Friday’s trade on a subdued note, slipping 270 points to close at 79,809.65 as persistent concerns over fresh U.S. tariffs on Indian exports weighed on investor sentiment and kept foreign inflows under pressure,” observed Vikram Kasat, Head – Advisory at PL Capital.

Looking ahead, market participants are closely watching for developments in India-US trade negotiations and the potential outcomes from Prime Minister Modi’s visit to China over the weekend for the SCO summit. “Market is likely to watch out for any positive developments during PM Modi’s much-anticipated visit to China over the weekend for the SCO summit – his first visit in seven years,” said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services.

With technical indicators pointing to further weakness and the rupee under severe pressure, analysts expect volatility to persist in the near term, with crucial support levels being watched closely at 24,250-24,350 for the Nifty.

Published on August 29, 2025