Market outlook for the week (07-Jul to 11-Jul, 2025)

SECTORAL STORY FOR THE WEEK TO JULY 04, 2025

The week to July 04, 2025 saw Nifty and Sensex losing -0.69% and -0.74% respectively. During the week, FPIs were net buyers in Indian equities worth $497 Million, but tariff and trade deal uncertainty had its impact. Here are 20 key sectors for the week.

Data Source: NSE

Out of 20 key sectors, 10 sectors delivered positive returns and 10 gave negative returns for the week. The star theme was consumer durables amidst robust demand, followed by healthcare and PSU banks. Losers included private banks, NBFCs, and realty. Out of 10 losing sectors, 4 sectors fell more than 1%. Out of 10 gaining sectors; 5 sectors gained over 1%.

Average returns of the 20 sectors stood at 0.13%. The top 5 sectors delivered 2.00% returns, while top 10 sectors gave average returns of 1.15%. The bottom 10 sectors delivered -0.88% on average. The markets have been largely cautious ahead of the possible impact of the reciprocal tariffs kicking in on 09-July and the impact of the passage of the OBBBA.

WEEK THAT WAS; THE GOOD, THE BAD AND THE UGLY

The fiscal deficit as of end May 2025 came in at just 0.8% of full year target. However, this could be misleading as it includes the front-loaded impact of RBI dividends of ₹2.69 Trillion. While India still does not have a trade deal on hand, both sides are confident that they can have a workable interim deal before the deadline of 09-July. On the investment side, India is betting big on capex in defence and in self-sufficiency in key commodities like copper.

On the downside, the IIP number came in at 1.23% for May 2025; sharply lower than the 2.57% reported in April 2025. This was due to a combination of slowing capex and pressure on exports. But, the big news in the week was the SEBI order against Jane Street for allegedly influencing index volatility. Jane Street was a significant player in F&O and their absence is likely to create a big volume void in the trading liquidity.

STOCK MARKET TRIGGERS FOR COMING WEEK TO JULY 11, 2025

Here are key triggers that could influence stock markets next week.

• While the Jane Street order was passed last week, the impact is likely to be relatively prolonged. The absence of Jane Street will create a big void in volumes, and that is likely to impact the F&O participation of retail and HNI in a significant way.
• The big focus area next week will be whether the Indo-US trade deal happens before the deadline of 09-July. There are still disputed areas in agriculture, services, and in GM crops. It is likely that there could be an interim deal to keep status quo on tariffs.
• The FOMC will publish the minutes of the US June Fed policy in the coming week. It would be interesting to study the dot-plot charts of FOMC members, especially in the light of the pressure that Trump has been applying on the Fed to cut rates.
• The results season starts in the coming week with TCS and Avenue Supermarts (D-Mart) being the only large caps to announce their results. This quarter will be critical to see the impact of the trade disruption as well as the impact of agricultural growth last year.
• Key global data points. Fed balance sheet, crude stocks, Atlanta Fed GDP, Fed Speak, FOMC Minutes, WASDE report, and Budget Deficit (US). Eurogroup Meetings (EU); Current Account Surplus (Japan); CPI, PPI, Trade Surplus (China); and Trade balance, Band of England Financial Stability Report (BOE-FSR) (UK).

What does this mean for Nifty and Sensex levels in the coming week to July 11, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX was flat this week at 12.33 levels, as global risks abated, but trade deal uncertainty mounted. This could lead to VIX stabilizing in a range.

• Nifty closed the week at 25,461 Spot. Nifty has immediate support at 25,372 and major support at 25,233. Immediate resistance is at 25,510 and later at 25,649. Nifty remains a long trade, unless it breaks below 25,338 with volumes. Shorts only below that!
• Sensex closed the week at 83,433 Spot. Sensex has immediate support at 83,140 and major support at 82,678. Immediate resistance is at 83,602 and later at 84,064. Sensex remains a long trade, till it breaks below 83,050 with volumes. Shorts only below that!

The entire focus in the coming week would be on the Indo-US trade deal happening. But the bigger overhang for the Indian markets would be the outcome of the Jane Street order.