Market outlook for next week (18-Aug to 22-Aug, 2025)

18 Aug 2025 , 07:23 AM

SECTORAL STORY FOR WEEK TO AUGUST 15, 2025

The week to August 15, 2025 saw Nifty and Sensex gaining +1.10% and +0.93% respectively. During the week, FPIs were net sellers in Indian equities worth $(348) Million, as traders stayed light in a truncated week. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (15-Aug)	Index (08-Aug)
Nifty Healthcare	3.60%	14,644.90	14,135.55
Nifty Automobiles	2.74%	24,118.80	23,474.65
Nifty India Defence	2.59%	7,804.80	7,607.90
Nifty India Digital	2.36%	8,845.50	8,641.35
Nifty Mobility	2.25%	21,046.80	20,582.70
Nifty PSU Banks	2.09%	7,025.25	6,881.25
Nifty Capital Markets	2.07%	4,408.05	4,318.50
Nifty Non-Banks	1.29%	29,241.15	28,868.75
Nifty Infrastructure	1.27%	8,991.45	8,879.10
Nifty IT	1.26%	34,833.20	34,398.50
Nifty Metals	0.76%	9,216.25	9,147.10
Nifty CPSE	0.75%	6,364.65	6,317.20
Nifty Banks	0.61%	55,341.85	55,004.90
Nifty Realty	0.59%	879.35	874.15
Nifty MNC	0.54%	28,286.60	28,134.05
Nifty Private Banks	0.34%	26,655.00	26,564.70
Nifty Oil & Gas	0.07%	10,997.35	10,989.15
Nifty Chemicals	-0.22%	29,915.87	29,982.61
Nifty FMCG	-0.45%	54,656.30	54,900.95
Nifty Consumer Durables	-0.59%	37,329.60	37,549.60

Data Source: NSE

For the week, 17 out of 20 sectors delivered positive returns, while 3 gave negative returns. The star themes were Healthcare, Automobiles, Defence, Digital, and Mobility; which rallied on being largely India stories. Losers included Consumer Durables and FMCG. Out of 17 gaining sectors, 7 sectors gained over 2%.

Average returns of 20 sectors stood at 1.20%. The top 5 sectors delivered 2.71% returns, while top 10 sectors gave returns of 2.15%. Bottom 10 sectors delivered 0.24%, showing lot of positive vibes in the market. Going ahead, we could see the impact of sovereign upgrade of India, and the upgrade of large chunks of the financial sector by S&P, panning out.

WEEK THAT WAS; THE GOOD, THE BAD AND THE UGLY

On the positive side, the big news was the unexpected sovereign rating upgrade of India from BBB- to BBB with stable outlook. This is likely to temper yields and lower cost of funds. The other big positive in the week was the consumer and wholesale inflation falling sharply to 1.55% and -0.58% levels respectively. This makes the case for another rate cut. The Indian IPO market saw some good appetite, leading to more big IPO filings with SEBI.

On the downside, the tariff story continues to be an overhang, especially for sectors like textiles, specific chemicals, gems & jewellery, and leather products. Clarity is awaited on the full impact. During the week, the trade data for July was announced, which saw the merchandise trade deficit widen to an 8-month high of $27.35 Billion. That is likely to put some pressure on the current account deficit (CAD) for the first half of FY26.

STOCK MARKET TRIGGERS FOR COMING WEEK TO AUGUST 22, 2025

Here are key triggers that could influence stock markets next week.

• The coming week will see the outcome of the sovereign rating upgrade by S&P. This is especially likely to be positive for the financial sector, considering that most of the major financial institutions have also been upgraded by S&P, as part of the macro upgrade.
• The RBI MPC will publish minutes of the August MPC meet in the coming week. It will be critical to understand the possibility of a rate cut in October. That possibility has opened up wide, after the inflation fell sharply for the month of July 2025.
• Two important events will set the US monetary tone in the coming week. Firstly, there is the FOMC minutes and later there is the 3-day Jackson Hole Symposium in the US, wherein the best global brains will debate on the future trajectory of monetary policy.
• The July core sector growth to be announced next week assumes importance. With the Q1 average core sector growth at 1.3%, the markets will be looking at July core sector data to get the first impression of the impact of aggressive capex spending.
• Key global data points. Building Permits, Housing Starts, API Crude Stocks, Jobless Claims, Existing Home Sales, Powell Speak (US). CPI, Composite (EU); Trade Surplus, PMI, CPI (Japan); PBOC Loan Rates (China); PMI, Retail Sales (UK).

What does this mean for Nifty and Sensex levels in the coming week to August 22, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX inched up from 12.03 to 12.36 levels amidst uncertainty, as the imposition of 25% plus tariffs raised the risk levels.

• Nifty closed the week at 24,631 Spot. Nifty has immediate support at 24,594 and major support at 24,518. Immediate resistance is at 24,671 and later at 24,748. Nifty remains a Short trade, unless it breaks above 24,673 with volumes. Longs only above that!
• Sensex closed the week at 80,598 Spot. Sensex has immediate support at 80,475 and major support at 80,213. Immediate resistance is at 80,736 and later at 80,997. Sensex remains a short trade, till it breaks above 80,853 with volumes. Longs only above that!

The focus in the coming week would be on the minutes of the RBI MPC and the FOMC meet; as well as the outcomes from the Jackson Hole Symposium!