Caution is the Better Part of Valour ⚠️

Market Performance

What began as a promising week for the markets quickly turned into a rough ride. Early optimism, fuelled by positive murmurs on the US-China trade front, gave way to rising geopolitical tensions that rattled global sentiment.

Indian equities weren’t spared from the storm, with benchmark indices taking a sharp knock by the week’s end. The Nifty slipped 1.14%, the Sensex shed over 1,000 points, and pressure trickled down across the board—from banks to midcaps.

Volatility was the only constant in this global tug-of-war between diplomacy and disruption.

Here's how the major indices fared:

Index	June 06, 2025	June 13, 2025	% Change
Nifty	25,003.0	24,718.6	-1.14
Bank Nifty	56,578.4	55,527.5	-1.86
Midcap Nifty	59,010.3	58,277.5	-1.24

Sector Performance

It was a rough week across the board, with most sectors closing in the red.

Capital Goods (-1.8%), Realty (-3.13%), Metals (-1.57%), FMCG (-2.29%), and Banks (-1.86%) were among the worst hit, alongside Auto, Consumer Durables, and Power, each down over 1%.

Broader weakness was visible, with several other sectors also ending lower, albeit mildly. On the brighter side, IT (+3.15%) led the gainers' pack, supported by Pharma (+1.2%) and Oil & Gas (+0.3%), which managed to swim against the tide.

Indices	Weekly Change (%)
Nifty IT	3.15
Nifty Pharma	1.39
Nifty Media	1.19
Nifty Energy	-0.51
Nifty Select Midcap	-1.03
Nifty Auto	-1.41
Nifty Metal	-1.57
Nifty Bank	-1.86
Nifty Financial Services	-1.91
Nifty FMCG	-2.29
Nifty PSU Bank	-2.33
Nifty Realty	-3.13

Weekly Top Gainers (Nifty 500)

Company	Weekly Gain (%)
Rattan India Ent.	25.92
Wockhardt	18.04
Manappuram Finance	13.02
Capri Global Capital	13.01
Oil India	12.73

Weekly Top Losers (Nifty 500)

Company	Weekly Loss (%)
Netweb Tech	-9.50
Cochin Shipyard	-9.16
Angle One	-9.08
United Spirits	-8.81
Schnider Electric	-8.51

Gold financing norms gave wings to Manappuram, while rising crude lifted Oil India. Capri Global rode the NBFC wave post RBI’s jumbo rate cut.

On the flip side, profit-booking dragged Netweb and Cochin Shipyard, and United Spirits soured after Maharashtra’s excise duty blow.

Liquidity Conditions

Geopolitical jitters and rising crude sent FIIs on the defensive, triggering a net sell-off in Indian equities.

However, domestic institutions stepped in as a stabilising force, cushioning the blow with steady buying.

Among emerging markets, India saw modest FPI inflows of US$ 334 million in June so far—outpaced by South Korea and Taiwan.

While peers like Indonesia and Malaysia saw net outflows, highlighting the selective nature of global capital in a volatile environment.

India Equity - Institutional Funds Flow (in Rs. crore)

Date	FII	DII
June 09, 2025	1,993	3,504
June 10, 2025	2,302	1,113
June 11, 2025	-446	1,585
June 12, 2025	-3,831	9,394
June 13, 2025	-1,263	3,041
Total	-1,245	18,637

Sentiment Wobbles Amid Global Flashpoints

Markets saw red this week, with volatility fuelled by a spike in geopolitical tensions following Israel’s pre-emptive strike on Iran.

The resulting crude price surge and FII outflows weighed on sentiment, even as DIIs stepped in to offer some support. The rupee weakened to 86.09 against the US dollar, underscoring the macro strain.

While retail inflation cooled off to 2.8%, offering a tailwind for policy easing, the rising oil risk threatens to complicate the RBI’s rate-cut path.

Global View

Global equities had a mixed run. US markets eked out modest gains on the back of easing tariff tensions and encouraging inflation data.

However, European and Asian markets remained jittery—dragged down by weak economic forecasts and geopolitical overhang.

The World Bank’s latest report flagged a global growth dip to 2.3% in 2025, down from 2.8%, further dampening sentiment.

Other Asset Classes

Brent crude surged to US$ 74.73 per barrel on Middle East tensions, while gold firmed up as investors sought safety.

Bond markets held steady, with India’s 10-year G-Sec yield closing at 6.34%. Despite the noise, market volatility indices remain surprisingly subdued, hinting either at resilience—or risky complacency.

Technical Perspective

The week began on a positive note but faced resistance near 25,200/82,800, leading to a reversal. A bearish weekly candle and a close below the 20-day SMA (24,850/81,600) indicate weak momentum.

As long as the index stays below this level, further downside toward 24,500/80,500 remains likely. A breach could intensify selling, dragging it to the 50-day SMA at 24,300/79,900.

On the flip side, a sustained move above 24,750/81,300 may trigger a pullback toward 24,950–25,000/81,900–82,100.

Bank Nifty has support at 55,000–55,200. Holding above could lead to a rebound toward 56,100–56,300, while a dip below 55,000 may open room for 54,500.

Caution is the Better Part of Valour

Geopolitical tensions are likely to keep markets on edge, with the Israel-Iran conflict adding a layer of uncertainty. While domestic indicators are gradually improving, any escalation beyond the region could derail recovery hopes.

Given elevated valuations—Nifty trading at 21.8x FY26e earnings versus its long-term average of 20.7x—there’s limited room for error. A negative trigger could easily shave off 4–5% from current levels.

We advise staying light on positions, focusing on capital preservation, and waiting for better entry points to accumulate quality names on dips.

Caution