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Markets extend opening losses in early deals after recent rally
Aug-22-2025

Indian equity benchmarks made a negative start on Friday and extended their losses in early deals following the broadly negative cues from Wall Street overnight as well as weakness in Asian counterparts as traders remained cautious amid lingering uncertainty about the outlook for interest rates ahead of US Fed Chair Jerome Powell's highly anticipated speech at the Jackson Hole Economic Symposium later in the day. Investors also booked some profits after recent rally. There was some cautiousness as SBI Research Report said that India's economic growth is expected to be lower at 6.3 per cent this fiscal compared to the RBI's projection of 6.5 per cent. Talking about headwinds, the report said a major source of concern for sustainable growth is the muted private capex.

The BSE Sensex is currently trading at 81630.64, down by 370.07 points or 0.45% after trading in a range of 81578.17 and 81993.61. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.02%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.66%, Industrials up by 0.26%, Healthcare up by 0.21% and Telecom up by 0.16%, while Metal down by 0.71%, Bankex down by 0.59%, Oil & Gas down by 0.56%, Basic Materials down by 0.53% and Energy down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Bharat Electronics up by 1.28%, Mahindra & Mahindra up by 0.82%, Sun Pharma up by 0.72%, Bajaj Finance up by 0.68% and Larsen & Toubro up by 0.21%. On the flip side, HCL Technologies down by 1.33%, Asian Paints down by 1.25%, ITC down by 0.96%, Tech Mahindra down by 0.91% and TCS down by 0.85% were the top losers.

Meanwhile, SBI Research Report has said that India's economic growth is expected to be lower at 6.3 per cent in the fiscal year 2025-26 (FY26) compared to the Reserve Bank of India’s (RBI's) projection of 6.5 per cent. The report pegged the first quarter Gross Domestic Product (GDP) estimate at around 6.8-7 per cent, mainly due to muted private capex. The report said the Indian economy is expected to grow at 6.5 per cent in the second quarter and at a lower rate of 6.3 per cent in the third quarter. It added that in the fourth quarter of the current financial year, the GDP growth will be lowest at 6.1 per cent.

Talking about headwinds, the report said a major source of concern for sustainable growth is the muted private capex. It said ‘Data based on a survey of 2,170 enterprises (conducted during April 2025), ranging from Agri, Manufacturing, IT, etc., has indicated that the intended capex for FY26 is significantly lower than the FY25 numbers...we believe that numbers may further decline as US tariffs may significantly impact the capex’. It said the impulse response of government capital expenditure to its own structural shock demonstrates strong persistence, and added that the estimated response exhibits an immediate positive jump, followed by short-term oscillations, and subsequently converges to a stable positive level.

It added public capital expenditure is not a transitory or noise-driven component of fiscal policy, but a persistent driver reinforcing its role as a structurally sustainable element in the expenditure composition.  With the imposition of tariffs by the US, it said ‘we may see an effect in revenue and margin pressure in export-oriented tariff-affected sectors, such as Textile, Gems and Jewellery, leathers, Chemicals, Agriculture, Auto Components, etc, in Q2’.

Compared to the SBI report, the Reserve Bank has projected real GDP growth at 6.5 per cent in Q1, Q2 at 6.7 per cent, Q3 at 6.6 per cent, and Q4 at 6.3 per cent. As per the latest Economic Survey, India's economy is likely to grow at 6.3-6.8 per cent in 2025-26 on the back of strong macroeconomic fundamentals, though strategic and prudent policy management will be required to navigate global headwinds. The country witnessed a muted growth at 6.5 per cent in 2024-25 (April 2024 to March 2025), down from 9.2 per cent in the previous year.

The CNX Nifty is currently trading at 24972.60, down by 111.15 points or 0.44% after trading in a range of 24950.60 and 25084.85. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 1.24%, Mahindra & Mahindra up by 0.73%, Bajaj Finance up by 0.66%, Sun Pharma up by 0.65% and JIO Financial up by 0.54%. On the flip side, HCL Technologies down by 1.39%, Asian Paints down by 1.29%, Grasim Industries down by 1.29%, Hero MotoCorp down by 1.29% and SBI Life Insurance down by 1.29% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 37.39 points or 0.15% to 25,142.00, Shanghai Composite strengthened 25.26 points or 0.67% to 3,796.36, KOSPI increased 20.78 points or 0.66% to 3,162.52, Straits Times rose 15.96 points or 0.38% to 4,246.86 and Jakarta Composite gained 5.61 points or 0.07% to 7,896.33. On the other hand, Taiwan Weighted lost 107.26 points or 0.45% to 23,854.87 and Nikkei 225 was down by 44.17 points or 0.1% to 42,566.00.
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