Sensex, Nifty set for a weak start as Trump signals 50% tariffs; key levels to track on August 26

The India VIX settled at 11.76; however, crossing above 12.50 could lead to higher volatility in the coming sessions.

Indian equities are set for a cautious start on Tuesday, August 26, after a draft notice revealed US President Donald Trump’s plan to slap 50 percent tariffs on Indian goods. At 8:15 am, the Gift Nifty was quoting at 24,916, down 71 points or 0.31 percent, signalling a weak open for the Sensex and Nifty.

Earlier this month, Trump said the US would raise tariffs on Indian goods to 50 percent from 25 percent, citing New Delhi’s purchases of Russian oil. The move is intended to curb India’s energy trade with Moscow and increase pressure on Russia to halt its war in Ukraine.

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Equity benchmarks Nifty 50 and Sensex recorded some gains, kicking off the holiday-truncated trading week on a positive note on Monday, August 25. Dovish signals from the U.S. Federal Reserve Chair Jerome Powell raised hopes of a rate cut, fuelling investor optimism across the globe.

Here are the important levels to watch out for in today's session

With Nifty failing to display directional strength, the index now clings to its crucial support at 24,800. The broader setup between the swing high of 25,150 and swing low of 24,850 indicates limited upside and a prolonged consolidation phase. Renewed call writing at higher strikes, coupled with sustained put additions at similar levels, further validates the sideways structure. Unless the index decisively clears 25,150, upward momentum is likely to remain capped. On the downside, sustaining above 24,800 is critical to prevent deeper corrections. For now, a “sell on rise” approach appears prudent, with traders awaiting a clear breakout above 25,100 or a breakdown below 24,800 for the next directional move. Ahead of the key tariff announcement on the 27th, the market is likely to witness sideways-to-volatile sessions.

"On the daily chart, the Nifty Bank index remains below all key moving averages except the 200-day moving average, highlighting that recovery attempts are being capped at higher levels. The index continues to hover close to the recent swing low of 54,905, which is acting as immediate support. A breakdown below this zone could drag the index further toward 54,600, which coincides with the 127.8 percent Fibonacci extension," Om Mehra of SAMCO Securities said.

"The broader trend remains fragile as long as the index stays below its short-term averages. Support is placed at 54,900, followed by 54,600, while resistance stays firm at 55,500–55,600. Until the index crosses above these hurdles, short-term moves may remain choppy with risks tilted toward the downside," he added.

The India VIX settled at 11.76; however, crossing above 12.50 could lead to higher volatility in the coming sessions.

The Put-Call Ratio (PCR) dipped further from 0.52 to 0.50, highlighting call-side dominance and supply pressure. At the same time, the oversold PCR also leaves room for a short-term relief pullback. The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market.

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