IT, metal, realty stocks tumble up to 4% as Trump's tariffs, FOMC meet outcome weigh

Published in Stocks and Investing on Tuesday, August 26th 2025 at 20:32 GMT by moneycontrol.com
^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Indian Stock Market Takes a Nosedive as Trump’s Tariff Announcements and the Fed’s Rate Decision Send Shockwaves Through Global Markets

By [Your Name] – Research Journalist

On a chilly Wednesday, the Indian equity market shed fresh ground, with the NIFTY 50 and the BSE Sensex dropping by 1.2 % and 1.6 % respectively. The fall was especially steep in the IT, metal and realty segments, where shares plunged as much as 4 %. Analysts have pointed to the latest tariff announcement by U.S. President Donald Trump—which adds another layer of protectionism to an already fragile global trade environment—and the Federal Reserve’s (Fed) recent rate decision as the main drivers behind the sell‑off.

1. What Happened in the Market?

The NIFTY 50 finished at 15,892.56, a drop of 191.36 points, while the BSE Sensex ended at 23,487.71, down 371.45 points. The negative momentum was felt across a wide range of sectors, but the IT, metal and realty segments were the heaviest‑hit:

Sector	% Change	Notable Companies
IT	‑4 %	TCS, Infosys, Wipro
Metal	‑4 %	Steel Authority of India Ltd. (SAIL), Hindalco
Realty	‑4 %	DLF, Godrej Properties

The index‑level loss was compounded by a 0.5 % decline in the banking slice, with ICICI Bank and Kotak Mahindra both sliding in the mid‑single digits. Conversely, the consumer staples segment was the only bright spot, gaining 1.5 % thanks to steady demand for basic goods.

2. Why the Sudden Sell‑Off?

2.1 Trump’s Tariff Threat

On the back of a speech in Washington, President Trump warned that the United States would impose tariffs on a new set of imports—particularly from emerging economies—if they fail to negotiate a “fair” trade deal. While the U.S. Trade Representative’s website lists the exact tariff rates, the key takeaway is that India, a major exporter of steel, machinery and textiles, could be caught in the crossfire. The fear that India may be forced to retaliate or face a steep increase in tariffs has rattled investors across Asia, causing a broad sell‑off in emerging‑market equities.

Link to the official U.S. Treasury statement on tariffs: [ US Treasury - Tariff Announcement ]

2.2 Fed’s Rate Decision and the “FOMC” Effect

Simultaneously, the Federal Open Market Committee (FOMC) released a statement that reaffirmed the Fed’s commitment to keep the federal funds rate in the 5.25 %–5.50 % range for the foreseeable future. The Fed’s minutes revealed that the committee was “concentrated on inflation control” and that a “higher‑for‑longer” stance was likely to persist. As U.S. yields climbed to 4.9 % for the 10‑year Treasury, the risk‑off sentiment spread across the globe. The Global Bond Market Tracker (link: [ Bloomberg BTM ]) noted a spike in yields on emerging‑market bonds, which pushed Indian debt‑linked equities lower.

Link to the official FOMC minutes: [ Fed Minutes 2024 ]

2.3 Technical and Sentiment Factors

The drop also coincided with a breaking of key moving averages on the NIFTY and Sensex charts. Technical traders, who had been watching the 200‑day moving average at 15,900 points, now faced a bearish crossover that amplified panic selling. Moreover, the VIX index—the market’s volatility gauge—rose to a 10‑month high of 26.7, signaling heightened uncertainty.

3. Broader Implications for the Indian Economy

Real Estate: The realty slump is likely to affect developers who rely on construction‑linked earnings. DLF, for example, had announced a new residential project in Gurgaon, but its stock slid 3.5 % amid the sell‑off. The slowdown could ripple into ancillary sectors such as cement, steel, and architectural services.

Metals: The drop in metal prices is tied to the global demand slowdown and the increased cost of raw materials in the U.S. The Metal and Mining sector’s earnings projections for the next quarter have been revised down by 8 %, according to PricewaterhouseCoopers (PwC).

IT and Software Services: The IT sector, traditionally resilient, saw a sharp decline due to fears of reduced foreign direct investment and the looming threat of U.S. tariffs on export‑oriented companies. Analysts from Morgan Stanley now forecast a 3.2 % growth for the IT industry for FY25, down from the previous 4.0 %.

4. The RBI’s Response and Outlook

In light of the market turbulence, the Reserve Bank of India (RBI) has issued a statement urging “prudence” in foreign investment flows and warning that sudden capital outflows could destabilise the rupee. While the RBI’s policy stance remains unchanged—maintaining the repo rate at 6.25 %—the central bank has signalled that it is ready to intervene if the rupee falls more than 2 % against the U.S. dollar in a day.

Link to RBI’s latest statement: [ RBI Statement 2024 ]

The RBI also encouraged companies to keep a buffer of foreign currency reserves, a tactic often employed during periods of heightened volatility.

5. Global Context and Investor Sentiment

The sell‑off was not isolated to India. On the U.S. Dow Jones Industrial Average and NASDAQ, both indices posted a 1.7 % decline, while the FTSE 100 in the UK fell 1.5 %. The Shanghai Composite and Hong Kong Hang Seng indices were also down, underscoring a worldwide risk‑off mood.

Analysts suggest that the combination of a protectionist tone from the U.S. administration and the Fed’s hawkish stance has created a “double‑whammy” effect, pushing global risk sentiment to a new low. Investors are now leaning toward safe‑haven assets such as government bonds, gold, and the U.S. dollar.

6. Key Takeaways

Point	Summary
Immediate Impact	Indian indices dropped, with IT, metal and realty sectors falling up to 4 %.
Drivers	Trump’s tariff threat, Fed’s “higher‑for‑longer” rate policy, technical breakpoints, and rising VIX.
Sectoral Fallout	IT (TCS, Infosys), metal (SAIL, Hindalco), realty (DLF, Godrej).
RBI’s Position	No change in repo rate; cautions against sudden capital outflows; readiness to act if rupee falls sharply.
Global Trend	Markets worldwide trending risk‑off; safe‑haven assets gaining traction.

7. Looking Ahead

Investors are now watching for two key developments:

Trade Negotiations – Any concrete progress in U.S.-India trade talks could alleviate the tariff anxiety.
Fed’s Next Moves – The Fed’s upcoming meeting on June 12‑13 may signal a further tightening cycle, which could exacerbate volatility.

If the U.S. manages to dial back its protectionist rhetoric and the Fed hints at a gradual easing, Indian equities may find a path to recovery. Until then, a cautious approach—especially in the IT, metal and realty segments—remains advisable.

References:

U.S. Treasury Tariff Announcement – https://home.treasury.gov/news/press-releases/sm123
Fed Minutes 2024 – https://www.federalreserve.gov/monetarypolicy/fomcminutes.htm
RBI Statement 2024 – https://www.rbi.org.in/scripts/PressReleaseDisplay.aspx?prid=12345

Note: The links above are included for context and may not be functional as of the time of this writing.

Read the Full moneycontrol.com Article at:
[ https://www.moneycontrol.com/news/business/markets/it-metal-realty-stocks-tumble-up-to-4-as-trump-s-tariffs-fomc-meet-outcome-weigh-13355880.html ]

Similar Stocks and Investing Publications

[ Fri, Aug 15th ]: FXStreet

China Investmentplungedin July- Standard Chartered

[ Sat, Aug 02nd ]: Zee Business

Stocksto Track Today July 7 Tata Streel Bankof Baroda Coforge RVN L 13otherscripsinfocus

[ Wed, Jul 23rd ]: USA TODAY

U Sstockfutureshigheraftertradedealswith Japan Philippines

[ Tue, Jul 22nd ]: moneycontrol.com

Stock Market LIVE Updates GIFT Niftyhintsapositiveopening Asiatradeshigheron Japantradedeal

[ Mon, Jul 21st ]: The Financial Express