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Below the Quote on Weekly market outlook 29th August 2025 by Vinod Nair, Head of Research at Geojit Investments Limited

"Indian equities ended lower this week as early optimism was overshadowed by sustained selling amid rising global and domestic headwinds. Markets began on a positive note, supported by proposed GST rationalisation, a favourable monsoon outlook, and global cues such as easing US bond yields and prospects of a Fed rate cut in September, which lifted IT stocks and boosted sentiment. However, caution set in ahead of the US penalty tariff deadline, sparking broad-based selling and risk aversion. The subsequent imposition of tariffs on Indian goods further dented confidence, driving profit booking across sectors. Large caps declined, while mid- and small caps saw sharper losses on stretched valuations and heightened uncertainty. FMCG and consumption-oriented stocks were relative bright spots, aided by expectations of steady demand.

Looking ahead, India’s resilience, supported by strong Q1 GDP print driven by government spending and policy measures, may provide a buffer against external headwinds, though fiscal concerns remain.  A resolution of tariff disputes could act as a key catalyst for market sentiment, although the reciprocal 25% tariff is expected to remain in place in the near to medium term. Currently, sectors likely to be directly affected include Textiles, Equipment Manufacturers, Metals, Auto, and Seafood, while IT and Pharma may face sentimental pressure despite not being directly impacted by the tariffs.

In the interim, markets are likely to display a mixed bias, with consumption-driven and domestic growth-oriented sectors—such as FMCG, Durables, Discretionary, Cement, and Infrastructure—well-positioned to benefit from GST cuts, firm demand, and higher government spending. However, limited progress in trade talks continues to add uncertainty and weigh on investor confidence. A multi-cap asset allocation strategy is expected to dominate in the current landscape. Investors will also keep a close watch on upcoming domestic and US macro data, including PMI prints, jobless claims, payrolls, and unemployment figures, for further insights."

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