Market outlook for the week (01-Sep to 05-Sep, 2025)

1 Sep 2025 , 09:24 AM

SECTORAL STORY FOR WEEK TO AUGUST 29, 2025

The week to August 29, 2025 saw Nifty and Sensex losing -1.78% and -1.84% respectively. During the week, FPIs were net sellers in Indian equities worth $(1,478) Million, as the tariffs going live spooked markets. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (29-Aug)	Index (22-Aug)
Nifty FMCG	0.73%	56,141.85	55,737.45
Nifty MNC	-0.17%	29,337.55	29,388.10
Nifty Consumer Durables	-0.51%	38,590.95	38,787.95
Nifty IT	-0.73%	35,181.25	35,440.85
Nifty Automobiles	-1.46%	24,960.85	25,329.45
Nifty Mobility	-1.92%	21,339.45	21,756.10
Nifty CPSE	-2.21%	6,142.00	6,281.10
Nifty India Digital	-2.28%	8,862.85	9,069.35
Nifty Metals	-2.35%	9,154.80	9,375.45
Nifty Private Banks	-2.37%	26,058.20	26,691.85
Nifty Infrastructure	-2.56%	8,873.10	9,106.25
Nifty Healthcare	-2.64%	14,350.30	14,738.80
Nifty Banks	-2.71%	53,655.65	55,149.40
Nifty Oil & Gas	-3.02%	10,789.75	11,126.10
Nifty Chemicals	-3.09%	29,463.65	30,403.64
Nifty PSU Banks	-3.46%	6,756.05	6,998.10
Nifty India Defence	-3.99%	7,410.25	7,717.85
Nifty Realty	-4.28%	870.75	909.65
Nifty Non-Banks	-4.39%	28,267.60	29,564.45
Nifty Capital Markets	-7.56%	4,092.35	4,427.20

Data Source: NSE

For the week, 19 out of 20 sectors delivered negative returns, while only 1 sector gave positive returns. The sole theme on the positive side was FMCG on safe-haven buying. Big losers included Capital Markets, NBFCs, Realty, Defence, PSU Banks, and Chemicals. Out of 19 losing sectors; 14 sectors lost over 2% and 7 sectors lost over 3%.

Average returns of 20 sectors stood at -2.55%. The top 5 sectors delivered -0.43% returns, while top 10 sectors gave returns of -1.33%. Bottom 10 sectors delivered -3.77%, showing lot of negative vibes in the market. Going ahead, the key factor in the coming week will be the reaction to GDP data, and how India reacts to the penal tariff imposition.

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

On the positive side, the GDP growth in the first quarter at 7.8% was nearly 130 bps better than street expectations as services and manufacturing flattered on the upside. For July 2025, the IIP growth also came in sharply higher at 3.47%, largely led by a surge in manufacturing. Amid the uncertainty, the Reliance AGM laid out its grand plans for doubling EBITDA by 2027 end, Jio IPO in H1-2026, and big outlays for clean energy and AI.

On the downside, the tariffs became effective from Wednesday August 27, 2025. That exposes nearly $50 billion of Indian exports to punishing tariffs. This will have an impact on output, jobs, and in bank NPAs. The Indian economy also added ₹4.55 Trillion to its fiscal deficit in the months of June and July, nearly twice of the corresponding period last year. This raises some serious questions of the 4.4% fiscal deficit target for the fiscal FY26.

STOCK MARKET TRIGGERS FOR COMING WEEK TO AUGUST 29, 2025

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

• The next week will see the market reaction to the GDP data, which was announced after market hours on Friday. While, the reaction should ideally be positive, it is likely to be circumscribed by the concerns over the punitive tariff imposition.
• With Prime Minister Modi gravitating closer to China, markets will be closely watching the equations that build up between India, China, and Russia. The upcoming SCO meeting will also be keenly tracked for key announcements.
• The coming week will see the US jobs data for August being put out. The street expectation is of around 4.2% unemployment. But the real important metrics will be that of the addition to non-farm payrolls, which has fallen sharply in recent months.
• The Indian rupee will be in focus in the coming week, especially after the rupee weakened to an all-time low of ₹88.20/$ in the week. While dollar index was steady, the fall in rupee was more due to the surge in demand for dollar exposure hedging.
• Key global data points. PMI, Construction Spending, Atlanta Fed GDP, Factory Orders, JOLTS, Trade Deficit, Fed Speak (US). PMI, Jobs, CPI, GDP (EU); Capital Spending, Household Spending (Japan); Caixin PMI (China); PMI, HPI, Retail Sales (UK).

What does this mean for Nifty and Sensex levels in the coming week to September 05, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX tapered from 12.18 to 11.75 levels despite the tariffs taking effect. It remains to be seen how the sovereign upgrade and GDP data will jointly influence the VIX.

• Nifty closed the week at 24,427 Spot. Nifty has immediate support at 24,364 and major support at 24,196. Immediate resistance is at 24,531 and later at 24,699. Nifty remains a Short-trade, unless it breaks above 24,689 with volumes. Longs only above that!
• Sensex closed the week at 79,810 Spot. Sensex has immediate support at 79,597 and major support at 79,028. Immediate resistance is at 80,166 and later at 80,735. Sensex remains a short trade, till it breaks above 80,684 with volumes. Longs only above that!

The focus next week will be on the US jobs data; but more importantly on how Indian markets react to the combination of sovereign upgrade, flattering GDP, and tariffs?