Market outlook for the week (08-Sep to 12-Sep, 2025)

8 Sep 2025 , 09:44 AM

SECTORAL STORY FOR WEEK TO SEPTEMBER 05, 2025

The week to September 05, 2025 saw Nifty and Sensex gaining +1.29% and +1.13% respectively. During the week, FPIs were net sellers in Indian equities worth $(1,394) Million, as tariff impact continued to dominate. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (05-Sep)	Index (29-Aug)
Nifty Metals	5.75%	9,681.65	9,154.80
Nifty Automobiles	5.45%	26,320.60	24,960.85
Nifty Capital Markets	4.37%	4,271.35	4,092.35
Nifty Mobility	3.58%	22,103.50	21,339.45
Nifty non-Banks	3.40%	29,229.45	28,267.60
Nifty Consumer Durables	3.20%	39,825.95	38,590.95
Nifty MNC	1.83%	29,873.05	29,337.55
Nifty CPSE	1.72%	6,247.65	6,142.00
Nifty PSU Banks	1.47%	6,855.70	6,756.05
Nifty India Defence	1.46%	7,518.65	7,410.25
Nifty Oil & Gas	1.33%	10,933.70	10,789.75
Nifty India Digital	1.07%	8,957.90	8,862.85
Nifty Private Banks	1.07%	26,337.55	26,058.20
Nifty Healthcare	0.96%	14,487.85	14,350.30
Nifty Infrastructure	0.93%	8,955.35	8,873.10
Nifty Banks	0.86%	54,114.55	53,655.65
Nifty FMCG	0.27%	56,292.10	56,141.85
Nifty Realty	0.20%	872.50	870.75
Nifty Chemicals	-0.31%	29,373.24	29,463.65
Nifty IT	-1.55%	34,635.85	35,181.25

Data Source: NSE

For the week, 18 out of 20 sectors delivered positive returns, while only 2 sectors gave negative returns. The sole themes on the negative side were IT and Chemicals. Big gainers included Metals, Automobiles, Capital Markets, Mobility, NBFCs, and Consumer Durables. Out of 18 gaining sectors; 6 sectors gained over 3%, of which 3 sectors gained over 4%.

Average returns of 20 sectors stood at 1.85%. The top 5 sectors delivered 4.51% returns, while top 10 sectors gave returns of 3.22%. Bottom 10 sectors delivered 0.48%, showing positive vibes in the market. Going ahead, the key factors in the coming week will be Indian response to tariffs, and market reaction to India consumer inflation numbers.

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

A week after the GDP and IIP data flattered the street, there were more macro positives for India. The GST Council did a total rehaul of the GST slabs to reduce the burden on the consumers and boost disposable incomes. The current account deficit for Q1FY26 came in at just $(2.4) Billion or a mere 0.2% of GDP. Above all, India put up a good show at the SCO in Tianjin, sending a message to the US that it preferred to be treated as equals.

On the downside, the tariff impact remains an overhang. In the short term, the tariffs will make exports worth nearly $50 billion uncompetitive. The fiscal deficit also remains an overhang and these factors have resulted in a sharp fall in the rupee as well as persistent FPI selling. Above all, the US unemployment numbers hint at a very likely Fed rate cut in September. That is likely to limit the options for the RBI MPC.

STOCK MARKET TRIGGERS FOR COMING WEEK TO SEPTEMBER 12, 2025

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

• The big story in the coming week will be how India takes on the tariff shocker. India did put up a good alternate front in Tianjin, but now it is down to brass tacks. The big challenge will be dealing with the output and job repercussions of the export impact.
• MOSPI will announce India CPI inflation for August this week and it is most likely to taper further from the last reading of 1.55%. However, the impact of GST cuts on inflation would only be visible in the next 2 to 3 months.
• Ahead of the FOMC meet and the quarterly macro projection update on September 17, the CPI inflation data also assumes importance. The hope will be that the headline inflation does not go much higher from 2.7% and the core inflation from 3.1%.
• The Indian rupee will continue to be in focus in the coming week, after it weakened to an all-time low of ₹88.36/$ in the week. This is despite the flat-to-weak dollar index. Clearly, the domestic rush to hedge open dollar positions is spurring dollar demand.
• Key global data points. Consumer Credit, PPI, Atlanta Fed GDP, Federal Budget, CPI, Jobless Claims, OPEC Meet, and WASDE Report (US). Eurogroup Meetings (EU); Current Account, GDP, IIP (Japan); Trade, CPI (China); GDP, IIP, Trade Deficit (UK).

What does this mean for Nifty and Sensex levels in the coming week to September 12, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX tapered from 11.75 to 10.78. despite tariffs taking effect. The VIX touched a low of 9.95 during the week, a typical base that triggers a market uptrend!

• Nifty closed the week at 24,741 Spot. Nifty has immediate support at 24,631 and major support at 24,420. Immediate resistance is at 24,842 and later at 25,052. Nifty remains a Long-Trade, unless it breaks below 24,632 with volumes. Shorts only below that!
• Sensex closed the week at 80,711 Spot. Sensex has immediate support at 80,342 and major support at 79,627. Immediate resistance is at 81,058 and later at 81,773. Sensex remains a Long-Trade, till it breaks below 80,345 with volumes. Shorts only below that!

The focus next week will be on the inflation data, but real focus will be the market reaction to the tariffs and the sectoral impact of the GST rehaul!