Quote on Weekly Note 08th August 2025 by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd
Below the Quote on Weekly Note 11th August 2025 by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd
Markets Extend Losing Streak to Sixth Week on US Tariff Jitters and Mixed Earnings
Markets extended their losing streak for the sixth consecutive week, weighed primarily by escalating trade tensions between the US and India. The tone remained muted in the early part of the week, but selling pressure intensified as the days progressed. Ultimately, both the Nifty and the Sensex lost nearly a percent each, closing at 24,363.30 and 79,857.79, respectively.
Key Market Drivers
The dominant driver of the week’s decline was the sudden escalation in US tariffs, with the US President unexpectedly announcing a 50% levy on Indian goods. The RBI’s decision to maintain the policy rate at 5.50% with a neutral stance, signaling near-term uncertainty, failed to bring any cheers. Although the services PMI for July remained robust at 60.5, indicating resilient demand, it failed to offset the bearish mood triggered by trade policy risks. FIIs were net sellers to the tune of ?11,770 crore, reflecting broader risk aversion across emerging markets, though continued buying by DIIs helped limit the downside.
Sectoral Snapshot
Sector performance was mixed, with pharma, realty, and FMCG among the top laggards. Conversely, the metal index gained 0.57%, supported by expectations of steady domestic demand and potential global supply constraints. Auto stocks edged up 0.22% despite weak retail sales, buoyed by optimism ahead of the festive season. Broader indices moved largely in line with the benchmarks, ending over a percent lower each.
Key Events to Watch
In the coming week, attention will turn to domestic CPI and WPI inflation data. Developments in US–India trade relations will also remain in focus amid ongoing discussions over a trade agreement.
The earnings season is nearing its end, with key results due from Ashok Leyland, ONGC, IOC, Hindalco Industries, BPCL, and others, which could drive stock-specific action.
Technical Outlook
The Nifty’s close below 24,450 has increased the risk of further correction, with immediate support placed near 24,200—the 200-day EMA—followed by 23,950. On the upside, resistance is expected around the 24,600–24,800 zone, with a stronger barrier at 25,200. Broader market indices remain vulnerable given their higher beta to FII outflows, while the advance–decline ratio continues to signal weak breadth. Any rebound is likely to be short-lived unless accompanied by easing trade tensions and a reversal in FII flows.
Strategy Ahead
Near-term market direction will be shaped by clarity on US tariff implementation, India’s diplomatic response, and incoming inflation readings. A sustained breach of key supports could accelerate profit-taking, particularly in trade-sensitive and export-oriented sectors. However, domestic demand-driven segments such as infrastructure, select autos, and rural-focused FMCG may display relative resilience if macro conditions hold steady.
Investors may adopt a defensive-to-neutral stance, prioritizing companies with strong domestic earnings visibility and minimal tariff exposure, while maintaining cash buffers for opportunities during deeper corrections. Global developments, especially from the US economic calendar and any signs of softening trade rhetoric, will be pivotal in determining whether the current downtrend persists or stabilizes.
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