Indian equity markets ended the week on a negative note, with benchmark indices retreating as investors adopted a cautious stance ahead of the July 9 US-India trade deadline and the upcoming corporate earnings season.
Both the Sensex and the Nifty registered weekly declines of 0.7 per cent, closing at 83,432.89 and 25,461 respectively. Despite a strong start to the week driven by bullish momentum, market sentiment weakened due to global uncertainties and profit booking following the recent rally.
Concerns over a possible delay in finalising key trade agreements weighed on sentiment. However, reports indicating the possibility of an interim deal between India and the US helped stem further losses during the latter part of the week.
Ajit Mishra, SVP – Technical Research at Religare Broking, noted, “The market witnessed a healthy pullback after the recent surge, as investors locked in profits. The cautious tone was driven by the approaching trade deadline, although expectations of a US-India agreement offered some support.”
On the macroeconomic front, India’s fiscal position remained solid. The government’s fiscal deficit stood at just 0.8 per cent of the annual target, buoyed by a significant ₹2.69 lakh crore dividend transfer from the Reserve Bank of India. In addition, June GST collections rose by 6.2 per cent year-on-year to ₹1.84 lakh crore, reinforcing domestic resilience.
Vinod Nair, Head of Research at Geojit Financial Services, commented, “Markets entered a consolidation phase after recent gains. With mixed global cues and the US tariff decision looming, many investors chose to remain on the sidelines. While FIIs turned cautious amid rich valuations, continued support from DIIs helped cushion the downside.”
Sectoral Trends:
- Outperformers: Defensive sectors such as IT and healthcare saw gains driven by stock-specific momentum and steady demand.
- Under Pressure: Banking, auto, and realty sectors came under pressure due to profit booking. FMCG stocks also declined modestly.
- Notable Gainer: Defence stocks attracted strong buying interest following the government’s approval of several high-value contracts.
Technical Outlook:
Markets entered a consolidation zone, according to Bajaj Broking Research. The Nifty formed a small bearish candle with a higher high and low on the weekly chart, indicating sideways movement.
Angel One analysts identified key support for the Nifty around 25,150–25,200, which aligns with the 20-day exponential moving average. Resistance is expected in the 25,600–25,740 range. “A breakout beyond this band could mark the beginning of the next leg of the rally,” they said.
With global and domestic factors in flux, market participants are likely to remain cautious in the short term, closely tracking developments in trade talks and earnings announcements.
