Market Recovery Attempt – Fear & Greed Drives Thursday’s Selloff Narrative

Thursday, August 29, 2025 – Global Markets Navigate US Tariff Concerns

Quick Market Snapshot

Market Sentiment: Fear Index at 30.32, down from 47.36 weekly Key Theme: Tariff uncertainty weighs on sentiment despite positive pre-market signals
Major Movers: GIFT Nifty up 44.5 points, suggesting modest recovery after Thursday’s rout

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Market Sentiment & Overview

The Fear & Greed Index closed at 30.32, firmly in fear territory and down significantly from the previous week’s 47.36, reflecting the heightened uncertainty that gripped markets following tariff worries that dragged Sensex 706 pts lower on Thursday. This sentiment shift captures investor anxiety around the 50 per cent tariffs on US exports that took effect on Wednesday, among the highest in Asia as tensions between New Delhi and Washington ramped up due to India’s continued purchase of Russian crude oil.

Despite the current fear reading, the weekly decline from 47.36 to 30.32 represents a notable shift in market psychology, with investors becoming increasingly cautious about new positions. The current reading suggests this is a “good time to open positions” for contrarian investors, though the broader market trend remains uncertain.

Key market-moving events of Thursday:

• US tariffs implementation creating uncertainty across sectors
• Nvidia earnings aftermath influencing global tech sentiment
• FII continued selling pressure with -₹3,856.5 crore outflow Thursday
• DII support remained strong with +₹6,920.3 crore inflow

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Indian Markets Deep Dive

Nifty 50 Performance Analysis

The Nifty50 settled at 24,500.9, down 211.15 points or 0.85 per cent, marking a significant technical breakdown. The index formed a long bearish candle with lower highs and lower lows on above-average volumes, breaking below the crucial 100-day EMA at 24,630.

Technical Analysis:

• RSI: 40.79 shows weakening momentum with bearish crossover
• MACD: Close to negative crossover with fading histogram strength
• Moving Averages: Trading below 20-, 50-, and 100-day EMAs
• Support Levels: 24,421 (S1), 24,341 (S2), 24,200 (S3)
• Resistance Levels: 24,642 (R1), 24,783 (R2), 24,863 (R3)

Sectoral Performance Breakdown:

• Best Performer: Nifty Consumer Durables +0.56%
• Worst Performer: Nifty Financial Services 25/50 -3.40%
• Banking Sector: Under severe pressure with Bank Nifty down -1.16%
• IT Sector: -1.59% amid global tech uncertainty

Top Individual Stock Movers

Top Gainers (Nifty 500):

• Vardhman Textiles: +13.03%
• Ola Electric: +7.91% (hitting five-month high)
• Sundram Fasteners: +5.13%
• Jaiprakash Power: +4.99%
• Waaree Energies Ltd: +4.66%

Top Losers (Nifty 500):

• Adani Total Gas: -6.79%
• Olectra Greentech: -5.73%
• Aditya Birla Fashion: -5.43%
• InterGlobe Aviation: -5.34%
• Brainbees Solutions: -5.33%

Bank Nifty Performance

Bank Nifty settled at 53,820, down 1.16 percent, continuing to underperform the broader market. The banking index formed a long bearish candle on above-average volumes, trading below the lower Bollinger Band, indicating stretched downside pressure.

Key Banking Insights:

• RSI at 28.58 entered oversold territory
• MACD already in bearish crossover with weakening histogram
• 250 points away from 200-day EMA support
• 400 points from 50% Fibonacci retracement level

FII/DII Cash Flow Analysis:

• Last 30 Days: FII -₹49,665.8 Cr, DII +₹97,689.7 Cr
• Thursday: FII -₹3,856.5 Cr, DII +₹6,920.3 Cr
• Trend: Consistent DII support offsetting FII selling

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Global Markets Roundup

US Markets Performance

The S&P 500 scored another record close on Thursday, finishing 0.32% higher at 6,501.86 after hitting a new all-time intraday high above the 6,500 level. The resilience in US markets contrasted sharply with the weakness in emerging markets, highlighting the divergence in investor sentiment.

US Market Highlights:

• S&P 500: 6,501.86 (+0.32%) – New all-time high
• Nasdaq: 21,705.16 (+0.53%)
• Dow Jones: 45,636.90 (+0.16%) – Also a record close
• Key Driver: Nvidia reported second-quarter results that beat Wall Street’s estimates with booming revenue growth of 56%

Asian Market Performance

Asian markets showed mixed performance ahead of key US economic data releases:

Current Asian Market Status:

• Hang Seng: 25,117.26 (+0.47%)
• Nikkei 225: 42,669.6 (-0.37%)
• KOSPI: 3,194.3 (-0.06%)
• ASX 200: 8,967.5 (-0.14%)

European Markets

European markets displayed a mixed picture with ECB policy decisions in focus:

European Performance:

• DAX: 24,039.92 (-0.03%)
• FTSE 100: 9,216.82 (-0.42%)
• CAC 40: 7,762.6 (+0.24%)

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Currency & Commodities

Currency Markets

The USD/INR rate closed at 87.59, showing slight appreciation of the rupee despite broader market weakness. The rupee ended 5 paise higher at 87.63 against the US dollar in Thursday’s session, showing resilience amid the equity market selloff.

Precious Metals

Gold stayed near a one-month high at $3,413.80 per ounce, up 3.6% this month. US December futures held at $3,473.80, with the precious metal benefiting from safe-haven demand amid geopolitical tensions and tariff uncertainties.

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Corporate Developments

Major Corporate Actions

Significant Announcements:

1. Infosys: Partnered with Mastercard to integrate Finacle with Mastercard Move for cross-border payments
2. CG Power: Subsidiary CG Semi launched first OSAT facility in Sanand, Gujarat
3. NTPC: Approved revised agreement to transfer coal mining business to NTPC Mining Ltd
4. Muthoot Finance: Injected ₹500 crore into subsidiary Muthoot Money
5. Renewable Energy Sector: Multiple companies likely to benefit from GST reduction on solar equipment from 12% to 5%

IPO Market Activity

Current IPOs (Opening/Closing):

• Abril Paper Tech Ltd: Aug 29 – Sep 2 (₹61-0 range, ₹13.42 Cr)
• Sattva Engineering Construction: Aug 26 – Aug 29 (₹70-75 range)
• Multiple other IPOs across various sectors showing healthy primary market activity

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Options & Derivatives

Nifty Options Analysis

The Nifty Put-Call Ratio rose to 0.86 from 0.72, showing some improvement in sentiment, though still indicating bearish positioning. The weekly options chain shows significant put buildup at lower strikes, suggesting defensive positioning by market participants.

Key Options Insights:

• High put OI at 24,000 and below strikes
• Call writing visible at 25,000+ levels
• India VIX at 12.18, slightly down but above short-term averages

Futures Activity

Long Buildup Stocks:

• Container Corporation: +32.78% OI
• Adani Enterprises: +24.97% OI
• Petronet LNG: +22.19% OI

Short Buildup Stocks:

• KPIT Technologies: -0.5% OI change
• Indraprastha Gas: -0.17% OI change

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Economic Calendar & Outlook

Key Events This Week

Friday, August 29, 2025:

• US PCE Price Index data
• Personal Spending and Income data
• University of Michigan Consumer Sentiment (Final)

Next Week Preview:

• September 1: US markets closed for Labor Day
• September 2: ISM Manufacturing PMI
• September 3: JOLTS data, Factory Orders

Market Outlook

The market faces a crucial juncture with multiple crosscurrents:

Positive Factors:

• DII buying support continuing
• GIFT Nifty showing pre-market strength (+44.5 points)
• Oversold conditions in banking sector creating rebound potential
• Government policy support for renewable energy sector

Risk Factors:

• US-India tariff tensions
• Continued FII selling pressure
• Technical breakdown in key indices
• Global uncertainty around Fed policy independence

Key Levels to Watch:

• Nifty: Support at 24,400, Resistance at 24,650
• Bank Nifty: Critical support at 53,200, Resistance at 54,400
• USD/INR: Range 87.20-87.80

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Bottom Line

Thursday’s market action reflected the complex interplay between global tariff concerns and domestic resilience. While the Fear & Greed Index at 30.32 suggests caution, the strong DII support and oversold technical conditions could set up for a relief rally. Key will be monitoring FII flows and global developments around US-China-India trade dynamics.

Investment Strategy: Focus on quality stocks with strong fundamentals, maintain defensive positioning, and watch for oversold bounces in banking and financial services sectors. The renewable energy theme offers structural opportunities amid policy support.

Data as of market close August 28, 2025, IST / Pre-market data August 29, 2025

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Disclaimer: This analysis is for informational purposes only and should not be construed as investment advice. Market conditions are subject to rapid change, and investors should conduct their own research and consult with financial advisors before making investment decisions.