The S&P BSE Sensex declined 507 points, or 0.62%, to 81,493, while the NSE Nifty 50 fell 149 points, or 0.59% to trade at 24,934.
On the 30-stock Sensex pack, shares of ICICI Bank, Adani Ports, HCL Tech, Eternal and Asian Paints led the laggards, sliding between 0.8% and 0.6%.
Sector-wise, financials lost 0.4%, with the banking index down 0.3% as heavyweights HDFC Bank and ICICI Bank slipped 0.5% and 0.8%, respectively.
Reliance Industries, the third-largest weight on the Nifty 50, dropped 0.7%.
In the broader market, midcaps edged up 0.2% while small-caps were little changed.Expert Views
The headwinds for the market from Trump tariffs will weigh on markets constraining the rally of the last 6 days, said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that “if the penal tariff of 25% kicks in on August, and this appears likely, the impact on India’s growth will be not be 20 to 30 bp estimated with 25% reciprocal tariffs, but more. The market will have to discount that.”
A significant trend in the market is the outperformance of largecaps, which is desirable and fundamentally justified, Vijayakumar said, adding that while Nifty is up by 1% during the last one year, Nifty Midcap 150 is down by 0.35% and Nifty Smallcap 250 is down by 4.7% during the same period.
“This trend is fundamentally justified and likely to continue. Midcap IT is showing resilience now. Investors should focus on valuations now,” said Vijayakumar.
On the technical front, Anand James, Chief Market Strategist at Geojit Investments, said Nifty’s upswings from yesterday went soft after stretching to the 25,153 level, “and within touching distance of the objectives that we had set out with last week.”
Directional indicators are yet to indicate enough momentum to continue pushing higher though, said James, adding that besides a bit of volatility expectations, the set up is not ready for a collapse either. “For now, 25033-24977 may continue to be used as the downside marker.”
Global Markets
Asian stocks edged higher in a cautious start Friday as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium for signals on the path of U.S. interest rates.
Markets are watching closely for any hint on whether the Fed may move toward a rate cut in September, following recent signs of labor market softness and questions over the near-term policy outlook.
MSCI’s broad index of Asia-Pacific shares outside Japan rose 0.2%, extending its monthly gain to 1.6%. South Korea’s Kospi led regional advances with a 1% jump, while China’s CSI 300 added to its winning streak with a third straight day of gains. Japan’s Nikkei 225 swung between positive and negative territory before inching up 0.1%.
In commodities, gold eased 0.1% to $3,334.20 a troy ounce.
FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) turned net buyers and bough equities worth Rs 1,246.51 crore on August 21, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 2,546 crore.
Crude Impact
Oil prices were steady Friday but remained on course to break a two-week losing streak, as fading prospects for a swift resolution to the Russia-Ukraine conflict kept a risk premium embedded in the market.
Brent crude slipped 4 cents to $67.63 a barrel in early Asian trading, while West Texas Intermediate eased 1 cent to $63.51.
Rupee vs Dollar
The Indian rupee slipped 8 paise to 87.33 against the U.S. dollar in early trade on Friday, with sentiment skewed bearish ahead of Federal Reserve Chair Jerome Powell’s speech later in the day that could shape expectations for the interest-rate outlook.
The dollar index, which measures the greenback against a basket of major peers, rose to 98.64, extending its winning streak to a fourth straight session.
(with inputs from agencies)