Market outlook for the week (04-Aug to 08-Aug, 2025)

4 Aug 2025 , 09:23 AM

SECTORAL STORY FOR WEEK TO AUGUST 01, 2025

The week to August 01, 2025 saw Nifty and Sensex losing -1.09% and -1.06% respectively. During the week, FPIs were net sellers in Indian equities worth $(2.00) Billion, as risk-off selling was rampant. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (01-Aug)	Index (25-Jul)
Nifty FMCG	2.96%	56,197.05	54,579.95
Nifty MNC	0.43%	28,684.25	28,562.20
Nifty Infrastructure	-1.07%	8,969.65	9,066.50
Nifty Chemicals	-1.18%	30,385.53	30,747.37
Nifty Automobiles	-1.56%	23,410.95	23,781.55
Nifty Banks	-1.61%	55,617.60	56,528.90
Nifty Mobility	-1.64%	20,623.15	20,966.40
Nifty CPSE	-1.79%	6,316.30	6,431.70
Nifty Consumer Durables	-1.87%	37,893.50	38,617.05
Nifty Oil & Gas	-2.34%	11,090.80	11,356.40
Nifty India Digital	-2.36%	8,740.45	8,951.35
Nifty Non-Banks	-2.48%	28,766.20	29,496.55
Nifty Private Banks	-2.48%	26,920.35	27,604.15
Nifty Healthcare	-2.54%	14,468.70	14,846.30
Nifty IT	-2.73%	34,649.60	35,623.75
Nifty PSU Banks	-3.29%	6,773.35	7,003.65
Nifty Capital Markets	-3.29%	4,303.60	4,450.20
Nifty Metals	-3.42%	9,102.35	9,425.10
Nifty India Defence	-4.76%	7,615.60	7,996.45
Nifty Realty	-5.73%	896.15	950.60

Data Source: NSE

Out of 20 key sectors, only 2 sectors delivered positive returns and 18 gave negative returns for the week. The star themes were FMCG and MNCs,  which were seen as safe defensive bets. Big losers included Realty, Defence, Metals, Capital Markets, and PSU Bank. Out of 2 gaining sectors, only 1 sector gained over 2%. In all, 5 sectors fell over 3% this week.

Average returns of 20 sectors stood at -2.14%. The top 5 sectors delivered -0.08% returns, while top 10 sectors gave returns of -0.97%. Bottom 10 sectors delivered -3.31%, showing lot of pressure on the downside. With the US imposing 25% plus Russia tariffs on India, the export sector could have a tough time in the coming week.

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

On the positive side, the ₹4,012 Crore NSDL IPO got subscribed over 41 times, indicating there was appetite for quality paper. The US Fed held rates in the range of 4.25%-4.50%, and that has been the case through 2025. That gives RBI the leeway to experiment with one more rate cut in August to boost growth. IIP growth was lower than average at 1.52% for June 2025; but the favourable revisions of May are a good portent for future trajectory.

On the downside, it is official that Indian exports to the US will attract 25% tariff plus penalty for buying oil and arms from Russia. That is likely to hit sectors like textiles, gems & jewellery, and chemicals. However, a much bigger concern for India is the spike in fiscal deficit by ₹2.68 Trillion in June 2025. With the need to boost growth and offset the negative effects of tariffs, government spending may rise, leading to overshooting fiscal deficit target.

STOCK MARKET TRIGGERS FOR COMING WEEK TO AUGUST 08, 2025

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

• The big story will be the impact of the 25% plus tariffs on Indian exports to the US. We could see quantification of impact for key sectors like textiles, chemicals, and jewellery this week. More importantly, India’s counter strategy will hold the key.
• The RBI MPC meets from 05-Aug to 07-Aug this week, culminating in the RBI policy statement. There is a strong possibility that the RBI may cut rates by 25 bps to boost growth and also keep the liquidity taps flowing amidst the ongoing global crisis.
• The big question for the coming week would be India’s approach to buying Russian oil. For now, India does not plan to change its oil basket, which is 35% dominated by Russia. The more important issue would be the business repercussions for specific companies.
• It is going to be another busy week for the IPO markets with ₹8,530 crore to be raised via primary issues. After the success of the NSDL IPO, the focus will be on the two big IPOs next week; JSW Cement and Knowledge Realty REIT.
• Key global data points. Factory orders, Trade deficit, API Crude stocks, Atlanta Fed GDP, Jobless Claims, Consumer Credit (US). PMI, ECB Bulletin (EU); BOJ Policy Minutes, Current Account Surplus (Japan); PMI, CPI, Trade Surplus (China); PMI, HPI, MPC (UK).

What does this mean for Nifty and Sensex levels in the coming week to August 08, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX bounced this week from 11.28 to 11.98 levels amidst uncertainty, as the imposition of 25% plus tariffs raised the risk levels.

• Nifty closed the week at 24,565 Spot. Nifty has immediate support at 24,472 and major support at 24,223. Immediate resistance is at 24,721 and later at 25,970. Nifty remains a Short trade, unless it breaks above 24,873 with volumes. Longs only above that!
• Sensex closed the week at 81,088 Spot. Sensex has immediate support at 80,291 and major support at 79,469. Immediate resistance is at 81,113 and later at 81,935. Sensex remains a short trade, till it breaks above 81,616 with volumes. Longs only above that!

The focus in the coming week would be on the outcome of the penal tariffs imposed by the US, India’s response sheet, and the critical RBI MPC meet!