Selective Opportunities Emerge 🔎

It was another rollercoaster week for Indian equity markets. After the sharp rally in the previous week, benchmark indices took a breather, with some consolidation setting in.

Profit booking at higher levels capped the gains, although the Nifty still ended 0.8% higher and the Sensex added 660 points.

The highlight of the week was the Bank Nifty, which scaled a fresh all-time high, buoyed by better-than-expected earnings from heavyweights ICICI Bank and HDFC Bank.

However, after the initial surge, some profit booking crept in here as well, leading to a bit of consolidation by the end of the week.

Market Performance

Here's how the major indices fared:

Index	April 17, 2025	April 25, 2025	% Change
Nifty	23,851.7	24,039.4	0.79
Bank Nifty	54,290.2	54,664.1	0.69
Midcap Nifty	52,657.8	53,570.2	1.73

Sector Performance

Among sectors, IT stole the show, with the index rallying 6.6%, while Tourism and Media indices lagged, each shedding over 2%.

The broader market carried forward its positive momentum for most of the week, before witnessing a sharp correction on Friday.

IT stocks led the charge, rebounding strongly as companies continued to deliver their Q4FY25 earnings.

Auto stocks also edged higher, shrugging off concerns around the global tariff war.

Indices	Weekly Change (%)
Nifty IT	6.56
Nifty Auto	2.91
Nifty Select Midcap	2.58
Nifty Realty	1.69
Nifty Pharma	1.68
Nifty Metal	1.10
Nifty Bank	0.69
Nifty Energy	0.47
Nifty PSU Bank	0.20
Nifty Financial Services	-0.14
Nifty FMCG	-0.25
Nifty Media	-2.11

Weekly Top Gainers (Nifty 500)

Company	Weekly Gain (%)
Waaree Energies	14.86
AU Small Finance Bank	14.40
Tata Elxsi	14.27
Newgen Software	13.92
Atul	12.74

Weekly Top Losers (Nifty 500)

Company	Weekly Loss (%)
Blue Star Company	-14.11
Syngene Int.	-13.41
Ramkrishna Forging	-11.20
PCBL Chemical	-11.16
PG Electroplast	-8.27

Most top gainers like Waaree Energies, AU Small Finance Bank, and Newgen rallied after strong results, while Tata Elxsi rose despite weak numbers on the back of deal wins and better guidance.

On the flip side, Syngene fell sharply after weak results and muted guidance, while Blue Star dropped on concerns over a demand slowdown in cooling products. Ramakrishna Forgings, PCBL Chemical, and PG Electroplast were among other loosers.

Liquidity Conditions

FIIs turned net buyers, infusing Rs. 17,059.90 crore into Indian equities during the week ending April 25, 2025, reversing heavy outflows earlier this month.

The rebound was driven by a weakening US dollar, easing global tariff concerns, and steady confidence in India’s macro outlook, despite a slightly lower IMF growth forecast.

Positive sentiment was further supported by hopes of India being the first to strike a new US trade pact.

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

Date	FII	DII
April 21, 2025	1,970	247
April 22, 2025	1,290	-886
April 23, 2025	3,333	-1,234
April 24, 2025	8,251	-535
April 25, 2025	2,952	229
Total	17,796	-2,179

Earnings Strength Meets Macro Uncertainties

The Indian equity markets continue to draw support from a better-than-expected 4QFY25 earnings season, with most sectoral leaders delivering strong operational performance.

Banking and financials have shown healthy credit growth with stable asset quality, while autos and consumer discretionary sectors are benefiting from improving urban demand.

The IT sector, though facing global headwinds, has managed to maintain margins through cost optimisation. Mid-cap and small-cap stocks have also participated in the rally, though valuation gaps between leaders and laggards are becoming more apparent.

However, the IMF's recent warning about India's slowing private investment cycle raises structural concerns. Corporate capex remains concentrated in sectors like renewables and infrastructure, while broader manufacturing and machinery investments continue to lag.

This trend, if persistent, could weigh on long-term productivity and GDP growth. Government spending, which had supported growth in recent years, is also showing signs of moderation due to fiscal constraints.

Globally, markets are reacting positively to softening trade tensions, with expectations of a potential rollback of US tariffs on Chinese goods boosting risk appetite.

FII flows into emerging markets, including India, have turned positive after months of volatility. On the domestic macro front, forecasts of a normal monsoon, steady oil prices, and the RBI's likely shift toward rate cuts in the second half of the year are providing additional support.

However, geopolitical risks, particularly in the Middle East, and any resurgence in inflation could disrupt the current equilibrium.

Technical Perspective

The Nifty remains in a corrective phase below 24,100 (79,300 Sensex). Support sits at 23,800/78,500, with a break potentially extending losses to 23,700/78,200.

A decisive breakout above 24,100/79,300 would signal a potential trend reversal, possibly triggering an upmove toward 24,400-24,500/80,200-80,500 for Nifty/Sensex.

For Bank Nifty, 55,000 is the pivot - below it, 54,000-53,700 comes into play, while a move above may push it toward 55,800-56,000. Trade cautiously until either support holds or resistance breaks with conviction.

Selective Opportunities Emerge

Investors should focus on stock-specific opportunities, prioritising companies with earnings resilience, healthy margins, and strong guidance. Banking and financials (rate-sensitive), rural-focused consumption (monsoon beneficiaries), and select industrials (if capex revives) offer potential upside.

However, maintain a balanced portfolio—consider booking partial profits in overvalued stocks while accumulating quality names on dips. Stay vigilant on global risks (geopolitics, trade wars) and monitor private capex trends for structural cues. A phased investment approach may work best in the current environment.

cautious