Indian stock markets experienced a positive opening on August 13, 2025, with the Nifty 50 index rising by 0.31% to 24,563.25 points and the BSE Sensex climbing 0.26% to 80,427.58 points. This upward trend was fueled by encouraging U.S. inflation data, which contributed to a global market rally. All sixteen major sectors saw gains, and small- and mid-cap indices also increased by 0.5%.
Domestically, India's retail inflation data for July provided a significant boost to market confidence. The Consumer Price Index (CPI) fell to an eight-year low of 1.55%, a substantial drop from 3.16% in April and 3.54% in July of the previous year. This marks the lowest inflation rate since June 2017 and the first time in over six years that it has fallen below the Reserve Bank of India's (RBI) target band of 2% to 6%. The cooling of food prices, with food inflation contracting by 1.8% in July, was a primary driver of this disinflationary trend. Analysts suggest this favorable inflation outlook grants the RBI greater flexibility to support economic growth. Despite these positive domestic and global indicators, concerns over potential U.S. tariffs on Indian goods loom. A proposed 50% tariff, linked to India's continued oil purchases from Russia, introduces uncertainty, as the U.S. administration has threatened these tariffs to pressure Russia. Economists warn that such tariffs could significantly diminish the competitiveness of Indian products in the U.S. market.
Market analysts maintain a cautiously optimistic outlook, projecting the Nifty 50 could reach 25,200 by March 2026, supported by expectations of continued political stability and declining interest rates in India. However, market performance is expected to remain sensitive to global economic conditions, domestic inflation trends, and evolving geopolitical developments, particularly concerning international trade policies. India's economic growth for fiscal year 2025-26 is projected to remain robust at approximately 6.5%, underscoring the economy's resilience amidst external pressures.