In the short-term, market scenario is weak, but since it is oversold, a sharp rebound from current levels cannot be ruled out
Market observers feel that if the trade deal with USA gets wrapped up by October, there will not be a major hit to earnings growth.
Companies just need clarity – once they know tariffs won’t escalate further, they can plan their costs and demand outlook better
•NSE Nifty lost 443.25pts (-1.78%) to 24,426.85
•BSE Sensex fell 1,497.2pts (-1.84%) to 79,809.65
•FIIs sold Rs21,151.90 cr; DIIs bought Rs28,645.04 cr
Spookedby multiple headwinds like the US imposing 25 per cent secondary tariffs on Indian shipments to US, raising overall duties to 50 per cent; unabated persistent FII selling, escalating trade tensions and lack of fresh domestic triggers; market snapped two-week gaining streak and shed nearly 2 per cent during the week ended. Market could have corrected much more but for expectations of GST rate cut in the upcoming GST council.
For the week, the Sensex ended 1,497.2 points or 1.84 per cent lower to close at 79,809.65 and the Nifty lost 443.25 points or 1.78 per cent to end at 24,426.85. Mild panic in the broader market was evident by the BSE Mid-cap Index falling nearly 3 per cent and the BSE Small-cap index shedding 3 per cent. Barring the FMCG sector, nearly all other sectors witnessed sharp selling. Indian rupee touched fresh record low of 88.31 against the US dollar. After trading in the range of 87.34-88.31, it ended 68 paise lower at 88.20 per dollar during the week ended. FIIs extended their selling for 9th consecutive week, selling equities worth Rs 21,151.90 crore. On the other hand, DIIs continued their buying for 20th consecutive week, purchasing equities worth Rs 28,645.04 crore.
FII selling in Indian markets in 2025 is attributed to a mix of global and domestic factors: US-India Trade Tensions, Weak Corporate Earnings (Disappointing Q1 results for several Indian companies raised concerns about profitability and growth); Rupee Depreciation (A weaker rupee makes returns less attractive and increases currency risk for foreign investors); High US Interest Rates (Rising US Treasury yields have narrowed the yield gap between Indian and US assets); Valuation Concerns (Indian equities continue to trade at higher multiples than peers, prompting caution and profit-booking); and Global Risk-Off/China Rotation (FPIs have rotated capital towards China and other markets offering lower valuations, government support, and tech-driven opportunities).
Fitch Ratings affirmed India’s Long-Term Foreign-Currency Issuer Default Rating at ‘BBB-‘ with a stable outlook, while S&P upgraded India’s sovereign rating to ‘BBB’ with a stable outlook. India’s economy surged 7.8 per cent in the April-June quarter, notching its fastest pace in five quarters; cementing its position as the world’s fastest-growing major economy, widening the gap with China and defying global headwinds.
Agriculture, Manufacturing, Construction, and Services all delivered “all-round growth. With appropriate countermeasures, India can limit the adverse impact of higher US tariffs on selected Indian imports to about 10 basis points of real GDP growth. Such measures could include export diversification, reducing import dependence (particularly on the US), strengthening domestic consumption, and expanding the domestic production base.
Market observers feel that if the trade deal with USA gets wrapped up by October, there will not be a major hit to earnings growth. Companies just need clarity – once they know tariffs won’t escalate further, they can plan their costs and demand outlook better.
However, if the deal drags on, the risks build up and the pressure on both earnings and the broader economy would be hard to ignore. Earnings recovery is the single biggest domestic trigger for equities. Market sentiment has been dampened by ongoing global uncertainty, particularly around trade and tariff talks. But domestic liquidity remains robust, with mutual fund inflows reaching record levels, highlighting sustained confidence among retail investors in India’s long-term growth potential. In the short-term market scenario is weak, but since it is oversold, a sharp rebound from current levels cannot be ruled out.
When it comes to investing, nothing will pay off more than educating yourself. Do the necessary research and analysis before making any investment decisions.
FUTURES & OPTIONS / SECTOR WATCH
Settlement week laced with holiday on account of Ganesh Chaturthi witnessed wave of selling on the back of concerns over growth, triggered by the US imposing additional tariffs on India. Nifty rollovers rose to 83.63 per cent, up from 75.71 per cent last month and above the three-month average of 78.11 per cent, indicating strong momentum for the September series. Bank Nifty rollovers also strengthened to 80.90 per cent, compared to 77.98 per cent last month, showing higher carryover of positions versus the previous series. For Nifty, most positions were rolled within the 24,800-24,850 futures zone, while in Bank Nifty the key rollover range is 54,650-54,750. In the options segment, the highest Call open interest was seen at the 24,600 and 24,500 strike levels, whereas Put writing was prominent at the 24,400 strike. Implied volatility (IV) for Nifty’s Call options settled at 10.93 per cent, while Put options concluded at 11.89 per cent. The India VIX, a key indicator of market volatility, concluded the week at 12.18 per cent. The Put-Call Ratio Open Interest (PCR OI) stood at 1.20 for the week. Fresh selloff is possible only if the level of 24,330/79700 is breached. On the other hand, above 24,550/80500, the pullback rally could continue up to the 20-day SMA (Simple Moving Average) or 24,700/81000 and 24,800/81300. On the downside, if the market falls below 24,330/79700, it could slip to the 200-day SMA or around 24,070/78900. Further downside may also continue, which could drag the market down to 23,900/78400. For Bank Nifty, if it sustains above 53,500, a pullback move is likely to continue toward 54,500-55,000-55,800. Conversely, if it falls below 53,500, it could decline toward the 200-day SMA or around 53,000-52,800. Traders should keep a close watch on these levels, track open interest trends, and stay alert to global geopolitical developments, as these factors could heavily influence market direction.
Stocks looking good are Britannia, Cipla, CG Power, Grasim, IDFC First, Torrent Power and Voltas. Stocks looking weak are Amber, IIFL, IEX, JSW Energy, KFIN Tech, Muthoot Finance and 360 One.
(The author is a senior maket analyst and former vice-chairman, Andhra Pradesh State Planning Board)
Dalmia Bharat Limited
Itis the fourth largest cement manufacturing company in India. The company is principally engaged in the business of manufacturing and selling cement and its related products. The company’s products include Ordinary Portland Cement (OPC), Portland Slag Cement (PSC), Portland Pozzolana Cement (PPC), Portland Composite Cement (PCC), and other specialty cements. The company has strategically located cement plants and is the only company to have Clinker Unit in Bihar. Average Life of the company’s Limestone Mines is 20+ years. The company has long-term tie-ups for Slag & Fly Ash and is one of the largest producers of Slag cement & blended cement. Commissioned 26 MW of group captive renewable energy in Q1 FY26. Operational RE capacity is expected to reach 576 MW by the end of FY26. With significant presence in every market wherein the company operates, has plans to grow capacity at a CAGR of 14 per cent – 15 per cent over the next decade to reach 110-130 MnT by 2031. In near term, the company is targeting 75 MnT by FY2028. The company offers its products to individual consumers and institutional customers. It provides a range of cement-based surface finish solutions as an alternative to putty. Its subsidiaries include Dalmia Cement (Bharat) Limited, Dalmia Cement (North-East) Limited, and Dalmia Bharat Green Vision Limited. Buy on declines for medium term target of Rs4000.