Investors Shift Focus to CPI, WPI Data, Q1 Earnings, and India-US Trade Talks
Indian stock markets faced downward pressure this week, halting a two-week gaining streak for broader indices. The decline, ranging between 0.6% and 1%, was driven by a lackluster start to corporate earnings, uncertainty surrounding India-US trade negotiations, and concerns over US President Donald Trump’s proposed 15-20% tariffs on most trading partners, according to Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.
The BSE Small-Cap index fell 0.6%, while the BSE Mid-Cap and Large-Cap indices each dropped 1%. The mid- and small-cap indices broke their two-week upward momentum, while large-caps extended losses for a second week. The BSE Sensex closed at 82,500.47, down 932.42 points or 1.11%, and the Nifty50 ended at 25,149.85, shedding 311.15 points or 1.22%.
Foreign Institutional Investors (FIIs) continued selling for the second consecutive week, offloading equities worth Rs 4,511.12 crore. In contrast, Domestic Institutional Investors (DIIs) maintained their buying spree for the 12th week, purchasing equities worth Rs 8,291 crore.
Sectoral performance was mixed. The BSE Telecom index plummeted 4.4%, BSE Information Technology dropped over 3%, and BSE Consumer Durables fell 2.7%. Other sectors, including BSE Metal, Energy, Auto, PSU Bank, and Oil & Gas, each declined by 2%. However, the BSE FMCG index gained 2%, and the Power index rose 0.6%, reflecting selective buying in consumption-driven sectors.
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Vinod Nair, Head of Research at Geojit Investments, noted, “The domestic market saw two weeks of consecutive selling due to global trade tensions and a weak earnings season kickoff. Delays in the India-US trade agreement and the US’s decision to impose a 35% tariff on Canada have heightened short-term uncertainties.” He added that consumption-oriented sectors like FMCG and discretionary stocks saw selective buying, supported by urban demand recovery, improving margins, easing inflation, declining interest rates, and a favorable monsoon.
Nair further highlighted that the lack of catalysts to justify premium valuations and disappointing results from a major IT company raised concerns about FY26 earnings. Investors are now closely watching Q1FY26 earnings for margin guidance and sector trends, alongside upcoming economic data from the US, India, and China.
In the small-cap segment, stocks like Dreamfolks Services, Hampton Sky Realty, Paras Defence and Space Technologies, Sadhana Nitrochem, Garware Hi-Tech Films, KR Rail Engineering, Sindhu Trade Links, Sharda Cropchem, Sigachi Industries, Deepak Fertilisers, HLE Glascoat, Nacl Industries, and Indian Metals & Ferro Alloys fell 7-14%. Conversely, Peninsula Land, Jaiprakash Power Ventures, John Cockerill India, Dish TV India, Shiva Cement, Force Motors, and ACME Solar Holdings surged 15-39%.
Nifty50 Outlook
Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities:
Nifty breached the critical support level of 25,200, signaling a bearish shift. Further weakness could push Nifty to 24,800-24,700 next week, with resistance at 25,300 on any pullback.
Amol Athawale, VP-Technical Research, Kotak Securities:
Nifty’s bearish candle on weekly charts and a lower top formation on daily charts, combined with a break below the 20-day SMA, suggest continued weakness. Below 25,300/83,000, Nifty could slide to 25,000/82,100 or even 24,800-24,650/81,500-81,100. A move above 25,300/83,000 could spark a rally to 25,550-25,650/83,700-84,000.
Siddhartha Khemka, Motilal Oswal Financial Services:
Volatility is expected to persist due to stock-specific factors during the earnings season. Trade uncertainties, including Trump’s tariff plans, will likely keep markets in consolidation. Investors should monitor CPI and WPI data, Q1 earnings, and India-US trade developments.
Rupak De, Senior Technical Analyst, LKP Securities:
Nifty’s weakness persists after breaking below the hourly swing low and the 21 EMA on the daily chart. With RSI in a negative crossover, momentum remains weak. Support lies at 25,090 and 24,900, while a move above 25,150-25,160 could trigger a rally to 25,250-25,400.
Disclaimer: Views expressed by experts are their own and not those of Moneycontrol.com or its management. Investors are advised to consult certified professionals before making investment decisions.