Weekly Market Report 25 Aug 2025 to 29 Aug 2025 | Scrolls

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Aug 30
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by KarNivesh | 30 August, 2025

The last week of August 2025 was anything but calm for Indian financial markets. Between fresh US tariffs, volatile trading sessions, strong GDP numbers, and buzzing IPO activity, investors had plenty to digest. Let’s break down what really happened and why it matters.

Markets Take a Hit

The week began with cautious optimism after US Fed Chair Jerome Powell hinted at possible rate cuts, which usually boosts global liquidity and investor sentiment. On Monday, the Nifty 50 and Sensex opened in the green. But that early cheer quickly faded.

By Tuesday, selling pressure set in, triggered by the US imposing steep 50% tariffs on Indian exports. The Nifty slid from 24,967 to close the week at 24,426, marking a 2.2% loss. The Sensex mirrored this fall, dropping to 79,809 by Friday—its lowest point since May. Banking stocks suffered the most, with the Bank Nifty down sharply due to worries about narrowing net interest margins and persistent foreign outflows.

Midcap and smallcap indices didn’t escape the storm either, with notable declines adding to the market gloom.

Global Scene: Mixed Fortunes

While India stumbled, global markets painted a mixed picture.

US indices like the S&P 500 and Dow Jones actually touched record highs, supported by optimism around AI-driven growth, especially after Nvidia’s results.
European markets showed resilience, posting modest weekly gains.
Asian peers saw uneven trends: Japan slipped, China gained, and India had been up in the earlier week before sliding hard.

On the commodities front, crude oil hovered around $64 per barrel, influenced by Middle East tensions and a weaker dollar. Precious metals, especially gold, gained as investors sought safety amid global uncertainty.

India’s Economy: Strength Amid Stress

Despite market turmoil, the Indian economy flashed some bright signals.

GDP Growth: India posted a 7.8% GDP growth rate in Q1FY26, beating expectations of 6.7%. This reinforced India’s title as the world’s fastest-growing major economy.
Inflation: CPI inflation cooled to a multi-year low of 1.55%, thanks to falling food prices. Wholesale inflation also slipped into negative territory. For the first time since 2019, inflation fell below the RBI’s tolerance band.
RBI Policy: The central bank had already cut rates earlier in the year but maintained a neutral stance in its August meeting, keeping the repo rate at 5.5%. With inflation trending down, the RBI even revised its forecast lower to 3.1% for FY26.

This mix of strong growth and softening inflation provided a cushion against external headwinds.

Earnings Season: A Mixed Bag

Corporate India’s Q1 results showed early signs of stabilization after several weak quarters. Aggregate profit growth came in at 13% year-on-year, though much of it was driven by Oil & Gas companies.

Winners included:

Indian Oil Corporation (IOC): Net profit surged 82.9% to ₹6,808 crore.
BSE Ltd.: Profit more than doubled to ₹539 crore, supported by record trading revenues.

FMCG majors like HUL and ITC showed resilience, while IT companies benefited from global rate cut hopes. On the flip side, banks struggled with tighter margins.

IPO Frenzy

August 2025 was one of the busiest months for IPOs in recent history.

40 companies hit the market across mainboard and SME platforms.
Collectively, they raised over ₹16,500 crore, the highest since September 2024.

Big names in the pipeline include Tata Capital, aiming for a massive ₹17,200 crore raise, along with Hero FinCorp, JSW Cement, and NSDL. On the SME side, investor enthusiasm remained sky-high, with several stocks like Aditya Infotech and Highway Infrastructure doubling or soaring on listing day.

Rupee & Bonds Under Pressure

The Indian rupee breached the ₹88 per dollar mark for the first time ever, ending the week at record lows. The sharp depreciation was a direct fallout of the tariff war with the US. Economists warned this could shave off as much as 0.8% from India’s annual GDP growth if tariffs persist.

Meanwhile, government bond yields crept higher, with the 10-year G-Sec yield closing at 6.61%. Concerns over fiscal slippage and higher borrowing requirements added pressure.

FII vs DII: Tug of War

Foreign investors (FIIs) continued to pull money out aggressively—selling over ₹46,000 crore worth of equities in August alone. On the other hand, Domestic Institutional Investors (DIIs) stepped up massively, pumping in nearly ₹95,000 crore, preventing an even deeper slide.

Interestingly, despite sharp falls in indices, volatility levels (India VIX) remained contained, signaling that panic selling was limited.

The Tariff Shock

The biggest development of the week was undoubtedly US President Donald Trump’s decision to double tariffs on Indian exports to 50%. This was one of the harshest trade measures ever against India, reportedly linked to India’s Russian oil imports and BRICS alignment.

Analysts warned that exports to the US—worth $86.5 billion last year—could fall to around $50 billion by 2026. Key sectors like textiles, gems, jewelry, shrimp, and carpets are at greatest risk.

Diplomatic tensions also spilled into defense and strategic ties, raising concerns about the broader India–US partnership.

What Lies Ahead?

Looking forward, markets will watch for:

India’s Manufacturing PMI (Sept 1) to gauge industrial momentum.
US jobs data (Sept 5), which could decide the Fed’s next move on rate cuts.
Corporate earnings from FMCG, IT, and banking players.
Trade negotiations, as India and the US try to resolve tariff disputes.

For investors, defensive sectors like FMCG and domestic consumption plays appear safest in the near term. IT offers selective opportunities, while banks may stay under pressure until margin worries ease. Infrastructure and healthcare could benefit from government and domestic spending focus.

Final Thoughts

The week of August 25–29, 2025, showed just how vulnerable markets can be to global shocks, even when domestic fundamentals are strong. While India’s economy continues to grow impressively, external risks—from tariffs to currency weakness—cannot be ignored.

For now, a cautious, selective approach seems wise. Investors may want to stay anchored in sectors with strong domestic demand, avoid overexposure to export-heavy businesses, and keep an eye on how diplomacy shapes up between Washington and New Delhi.