Indian stock markets experienced a significant upswing on Monday, August 25, 2025, with both the BSE Sensex and Nifty indices closing higher. This upward movement was largely attributed to a wave of positive investor sentiment, bolstered by optimistic global market trends and a strong performance from the information technology (IT) sector.
The BSE Sensex concluded the trading session at 81,635.91, marking a gain of 329.06 points, or 0.40%. Earlier in the day, it had reached an intra-day high of 492.21 points. Similarly, the Nifty closed at 24,967.75, up by 97.65 points, representing a 0.39% increase. Leading the charge were IT companies, with Infosys showing the most substantial gain of 3.03%. Tata Consultancy Services, HCL Technologies, and Tech Mahindra also posted notable increases of 2.85%, 2.6%, and 1.32%, respectively. This sector's strength was a key driver of the broader market rally, influenced by expectations of potential interest rate cuts from the U.S. Federal Reserve.
Vinod Nair, Head of Research at Geojit Investments Limited, commented that the anticipation of a September Federal Reserve policy meeting outcome and the subsequent fall in the 10-year bond yield created a favorable environment for the domestic market. He also noted that a cautious approach to global economic uncertainties has been beneficial. Ajit Mishra, Senior Vice President (Head) at Reliance Broking Limited, echoed this sentiment, stating that the market began the week on a positive note, supported by favorable global cues. He further indicated that a recent interest rate cut by the Reserve Bank of India is expected to provide additional impetus to the market.
Globally, markets in South Korea, Japan's Nikkei, China's Shanghai Composite, and Hong Kong's Hang Seng also traded in positive territory, reflecting a broad-based optimism. This positive international sentiment played a crucial role in lifting Indian equities. The U.S. markets had also ended sharply higher on Friday, August 23, 2025, with the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 all showing significant gains, driven by Federal Reserve Chair Jerome Powell's hints at possible rate cuts. This dovish stance from the Fed has been a significant catalyst for global risk appetite.
However, amidst the positive sentiment, a note of caution persists. Concerns linger regarding potential new U.S. tariffs, with an additional 25% levy on Indian goods scheduled to take effect on August 27, potentially raising total duties to 50%. This development could impact Indian exports, particularly in sectors like textiles, gems, and jewelry. Despite these headwinds, domestic factors such as proposed Goods and Services Tax (GST) rationalization aimed at boosting consumption and a favorable monsoon season are seen as supportive elements for the Indian economy and markets.
The market also saw mixed movements in mid-cap and small-cap stocks, which experienced marginal declines. Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth ₹1,622.52 crore on Friday, August 23, 2025, though strong domestic flows have helped to cushion the impact.