Choppy Waters Ahead for Markets ⚠️

Market Performance

It was yet another topsy-turvy week on Dalal Street as traders juggled a flurry of macro signals and a mixed bag of earnings. CPI, WPI and CAD figures turned up better than expected—giving the economy a thumbs-up—but the micro story wasn’t as cheerful, with several blue-chip results missing the mark for 1QFY26.

Add to that the suspense around the India–US trade deal, and the benchmarks felt the heat: the Nifty 50 slipped 0.72% while the Bank Nifty dropped 0.83%.

Interestingly though, the broader markets shrugged off the gloom. The Nifty Midcap 100 rose 0.79% for the week, reminding everyone that while the giants wobble, the midcaps can still dance.

Here's how the major indices fared:

Index	July 11, 2025	July 18, 2025	% Change
Nifty	25,149.9	24,968.4	-0.72
Bank Nifty	56,754.7	56,283.0	-0.83
Midcap Nifty	58,642.2	59,104.0	0.79

Sector Performance

On the sectoral front, Media bounced back strongly, topping the sectoral chart with a 3.92% weekly gain after two dull weeks.

Softer June inflation sparked hopes of a repo rate cut, lifting interest-rate-sensitive sectors—Realty rose 3.84% and Auto gained 1.70%.

On the flip side, IT slipped 1.46% as TCS, HCL Tech, and Tech Mahindra disappointed the street. Wipro was the lone bright spot, with management guiding for a revival in 2QFY26.

Indices	Weekly Change (%)
Nifty Media	3.92
Nifty Realty	3.84
Nifty PSU Bank	1.95
Nifty Auto	1.70
Nifty Pharma	1.65
Nifty Select Midcap	1.11
Nifty FMCG	1.07
Nifty Metal	0.80
Nifty Energy	0.37
Nifty Bank	-0.83
Nifty Financial Services	-1.11
Nifty IT	-1.46

Weekly Top Gainers (Nifty 500)

Company	Weekly Gain (%)
Anand Rathi Wealth	18.9
Patanjali Foods	16.6
Neuland Laboratories	16.0
GMDC	13.6
Sobha	13.0

Weekly Top Losers (Nifty 500)

Company	Weekly Loss (%)
DB Realty	-15.5
Newgen Software	-11.9
Bharat Dynamics	-10.0
Tejas Networks	-8.0
Clean Science and Tech.	-7.5

Among the top gainers, Anand Rathi Wealth surged 18.9% on strong earnings, while Patanjali Foods rose 16.6% after announcing a bonus issue. GMDC added 13.6% as the rare-earth metals crisis turned into an opportunity for the miner.

On the flip side, Newgen Software slipped 11.9% as investors snubbed its 1QFY26 results. Clean Science & Technology (part of our portfolio) dropped 7.5% following news of a promoter stake sale.

Liquidity Conditions

With uncertainty swirling around the US trade deal and broader global jitters, foreign investors continued to pare exposure to riskier equity markets—India included. So far in July 2025, FPI flows have been mixed across key emerging markets.

India saw outflows of US$ 406 million, while Brazil, Indonesia, Malaysia, and the Philippines also witnessed exits of US$ 620 million, US$ 382 million, US$ 142 million, and US$ 23 million, respectively.

In contrast, South Korea, Taiwan, Thailand, and Vietnam attracted inflows worth US$ 1,232 million, US$ 5,207 million, US$ 87 million, and US$ 473 million, respectively. For now, domestic institutional investors (DIIs) continue to provide a cushion, but foreign flows are likely to stay choppy in the near term.

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

Date	FII	DII
July 14, 2025	-1,614	1,788
July 15, 2025	120	1,555
July 16, 2025	-1,858	1,224
July 17, 2025	-3,694	2,821
July 18, 2025	375	2,104
Total	-6,671	9,492

Earnings, Inflation, Trade Shape Sentiment

Apart from the ongoing earnings season, India’s macro indicators offered some comfort. June CPI inflation cooled to 2.1% from 2.8% in May, staying well within the RBI’s tolerance band. The goods trade deficit for June narrowed to US$ 18.8 billion, thanks to a sharp drop in oil and gold imports, while the services trade surplus held steady at US$ 15.3 billion.

In the US, the Republican-controlled House passed a bill cutting US$ 9 billion in spending, sending it to President Trump’s desk. Markets were upbeat, with strong economic data and upbeat earnings lifting sentiment. Fed Chair Jerome Powell also responded formally to the White House’s questions about the Fed HQ’s renovation plans. Buoyed by robust retail data, the S&P 500 and Dow Jones gained 0.54% and 0.52%, respectively.

European markets remained mixed. The FTSE 100 edged up 0.09%, but Germany’s DAX slipped 0.12% amid sluggish retail sales and patchy economic signals across the Eurozone.

In Asia, Japan’s core inflation eased to 3.3% in June, down from a 29-month high of 3.7%, as rice inflation moderated. China’s persistent deflation didn’t dampen market mood—Hong Kong’s Hang Seng rose 1.51% and the Shanghai Composite added 0.50%. South Korea’s KOSPI, however, dipped by 0.13%.

Other Markets:

• Brent Crude: Closed at US$ 70.03 per barrel

• Rupee: Weakened to 86.16 per US dollar

• 10-Year G-Sec Yield: Ended the week at 6.31%

• Gold: Settled at Rs. 97,800 per 10 grams

Technical Perspective

Benchmark indices saw profit booking last week—Nifty slipped 0.72% and Sensex shed 742 points. Media (+3.77%) and Realty (+3.68%) outperformed, while Defence (-4%) and Private Banks (-2%) lagged.

Technically, the market shows a lower top pattern on daily charts and a bearish candle on weekly charts, hinting at a weak near-term setup. A fresh sell-off may unfold below 24,900/81,600, with downside targets of 24,600–24,500/80,700–80,400.

On the upside, the 50-day SMA at 25,050/82,100 and 25,100/82,300 mark immediate resistance. A move above 25,100/82,300 could see a bounce to the 20-day SMA at 25,320/83,000, and possibly up to 25,450–25,500/83,400–83,600.

For Bank Nifty, the 50-day SMA at 56,000 is support, while 56,900 (20-day SMA) acts as resistance. Below 56,900, expect a dip to 56,500–56,150; above it, a rally to 57,365–57,600 is possible.

Choppy Waters Ahead for Markets

We anticipate volatility to persist as benchmark indices continue to show a negative bias. The uncertainty around the US-India trade deal, coupled with a lacklustre start to earnings season, is keeping investor sentiment cautious.

Foreign institutional investors (FIIs) are still net sellers, adding to market pressure. While Reliance Industries’ strong results may provide a temporary pause to the downside, broader earnings need to deliver positive surprises to sustain any meaningful recovery.

Until then, choppy trading and sideways to downward pressure are likely to remain the theme in the near term.

Caution