Weekly Musings – Index performance for week ended July 18, 2025

SECTORAL STORY FOR THE WEEK TO JULY 18, 2025

The week to July 18, 2025 saw Nifty and Sensex losing -0.72% and -0.90% respectively. During the week, FPIs were net sellers in Indian equities worth $(1,090) Million, but there is an element of caution ahead of macro events. Here are 20 key sectors for the week.

Data Source: NSE

Out of 20 key sectors, 12 sectors delivered positive returns and 8 gave negative returns for the week. The star themes were Realty, Capital Markets, PSU Banks, Auto, and healthcare. Big losers included Defence, Private Banks, and IT. Out of 12 gaining sectors, 2 sectors gained over 3% and 7 sectors over 1%. Three sectors fell more than 1% this week.

Average returns of the 20 sectors stood at +0.37%. The top 5 sectors delivered 2.45% returns, while top 10 sectors gave returns of +1.70%. Bottom 10 sectors delivered -0.97% on average. With the tariff deadline of August 01, 2025 approaching and the US talking about secondary sanctions on India for buying Russian oil; cautions seems to be the watch-word.

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

Let us first look at the positive cues for the week. India CPI inflation came in at a 77-month low of 2.10%, even as WPI inflation slipped into negative after 17 months. This has opened the doors for one more rate cut by the RBI. Trade deficit in goods sobered to $18.79 Billion in June, even as overall deficit for June was just $3.52 Billion, after adjusting for service surplus. Reliance reported stellar results this week, helped by O2C margins and Jio Digital.

On the downside, the Indo-US trade deal continues to be elusive. However, there is a twist to the story with the US warning India of secondary sanctions. They are likely to impose 100% tariffs on India for importing oil from Russia. Even as the Jane Street controversy continues to impact market volumes, the short selling problem is back. Viceroy has made serious allegations about governance and credit risk on Anil Agarwal’s Vedanta group.

STOCK MARKET TRIGGERS FOR COMING WEEK TO JULY 25, 2025

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

• The big story to watch out for next week will be the progress on the trade deal with the US and the possibility of secondary sanctions. India has protested the idea of secondary sanctions as it interferes with its right to ensure energy security.
• In terms of data flows, the coming week will see the core sector growth for June 2025 published. It came in sharply lower at 0.7% in May, but June is likely to be better. Also, the HSBC PMI Compositive on business robustness will be published next week.
• Ahead of the next Fed meeting on July 30, 2025; the next week will see key speeches delivered by Jerome Powell and Michelle Bowman. Markets will be closely tracking their speeches for cues on how the Fed plans the rates trajectory. Rate cuts look unlikely.
• It will be an IPO heavy week with 5 IPOs opening next week on the mainboard, testing retail and institutional appetite. The NSDL IPO will also be completed this month and it is also likely to open for subscription this week, although dates are yet to be announced.
• Key global data points. Fed Speak, New Home Sales, Crude Inventories, Building Permits, PMI, Jobless Claims, and Atlanta Fed GDP (US). PMI, ECB Policy (EU); BOJ Core CPI, PMI Services (Japan); PBOC Lending Rate (China); Composite PMI, Retail Sales (UK).

What does this mean for Nifty and Sensex levels in the coming week to July 25, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX tapered this week from 11.82 to 11.39 levels, as global risks abated, but risks of secondary sanctions for importing Russian oil mounted.

• Nifty closed the week at 24,968 Spot. Nifty has immediate support at 24,877 and major support at 24,651. Immediate resistance is at 25,102 and later at 25,328. Nifty remains a Short trade, unless it breaks above 25,210 with volumes. Longs only above that!
• Sensex closed the week at 81,758 Spot. Sensex has immediate support at 81,466 and major support at 80,739. Immediate resistance is at 82,192 and later at 82,919. Sensex remains a Short trade, till it breaks above 82,569 with volumes. Longs only above that!

The focus in the coming week would be on the Indo-US trade deal progress and the secondary sanctions. Data flows are likely to be limited in the coming week.