Market outlook for the week (10-Feb to 14-Feb)

10 Feb 2025 , 09:16 AM

SECTORAL STORY IN THE WEEK TO FEBRUARY 07, 2025

The week to February 07, 2025 saw Nifty and Sensex inched up by +0.33% and +0.46% respectively. During the week, FPIs were net sellers of $(841) Million in Indian equities, but the budget failed to excite the market. Here is how 20 key sectors performed this week.

Sectoral Index	Weekly Returns	Index (07-Feb)	Index (01-Feb)
Nifty Metals	3.46%	8,585.80	8,298.50
Nifty Capital Markets	3.35%	3,584.00	3,467.95
Nifty Healthcare	3.22%	14,218.90	13,775.35
Nifty Non-Banks	2.63%	25,731.40	25,073.05
Nifty IT	2.12%	42,921.65	42,030.30
Nifty Private Banks	2.04%	24,924.40	24,425.50
Nifty India Digital	1.60%	9,221.35	9,075.75
Nifty Banks	1.32%	50,158.85	49,506.95
Nifty Automobiles	0.66%	23,459.95	23,305.45
Nifty Oil & Gas	0.58%	10,498.95	10,438.20
Nifty Mobility	-0.03%	19,239.55	19,245.70
Nifty Infrastructure	-0.06%	8,249.25	8,254.35
Nifty PSU Banks	-0.32%	6,196.75	6,216.80
Nifty Consumer Durables	-0.60%	38,473.25	38,704.10
Nifty Energy	-1.07%	32,817.30	33,172.60
Nifty MNC	-1.73%	27,059.80	27,534.85
Nifty CPSE	-2.10%	5,829.70	5,954.60
Nifty Realty	-3.65%	917.70	952.50
Nifty India Defence	-4.05%	5,946.70	6,197.95
Nifty FMCG	-5.62%	55,113.30	58,396.05

Data Source: NSE

Here are key takeaways from weekly sectoral returns table.

• Out of 20 sectoral indices, 10 sectors gave positive returns and 10 gave negative returns. The star performers of the week were Metals (+3.46%), Capital Markets (+3.35%), and Healthcare (+3.22%). Metals were betting big on an economic revival in China.
• Of the 10 sectors that contracted this week, big losers were FMCG (-5.62%) and Defence (-4.05%). Overall, 3 sectors fell more than -3%, while 6 sector fell more than -1% in the week. For defence the budget disappointment continued.
• For the week, the arithmetic average of returns of the 20 sectors stood at +0.09%. The top-10 sectors delivered +2.10%, while bottom 10 sectors delivered -1.92%. The dichotomy favoured global plays at the cost of domestic plays.

Nifty VIX fell sharply to 13.69 levels. The coming week could see the markets in a tight range as the Union Budget and the Monetary Policy are now out of the way.

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

Here are the key events that decided the course of the last week. Let us look at the positive triggers first. Firstly, the RBI monetary policy cut repo rates by 25 bps to 6.25%, which is positive for the rate sensitive sectors like autos, NBFCs, and realty. Secondly, the RBI estimate of inflation for FY26 at 4.2% is a positive as it is very close to the RBI target of 4%. Thirdly, US jobs data indicates at robust economic growth, so Fed may go easy on rate cuts in 2025. That will reduce divergence risk for India.

Let us turn to the negative swing factors in the week. The consumption boost promised by the budget is now being doubted by investment experts. That was evident in the sharp fall in FMCG stocks during the week. Secondly, the rupee continued to remain weak and the rate cut by the RBI will only worsen concerns over the rupee stability. Also, the RBI is wary of intervention and a rush for forex hedges, could only exacerbate the rupee fall. Lastly, global situation still remains in a state of flux with Trump pursuing tariffs aggressively and rising fears of an all-out trade war.

Let us turn to big triggers in the coming week; both domestic and global.

STOCK MARKET TRIGGERS FOR COMING WEEK TO FEBRUARY 14, 2025

Here are key triggers to keep a watch for in the coming week to February 14, 2025.

• The 5.3% fall in the FMCG index during the week was the dampening factor for markets. The pressure on FMCG is likely to continue and if Trump starts to target the BRICS countries, then most sectors other IT and healthcare could come under pressure.
• Key large cap results next week: Varun Beverages, Grasim, Eicher, Apollo Hospitals, HAL, Hindalco, Samvardhana Motherson. Key mid-cap results; Glenmark Pharma, Deepak Nitrite, IPCA, Ashok Leyland, Bharat Forge, Jubilant Foodworks, Berger, IRCTC, Nykaa .
• Big domestic macro data points next will be India CPI inflation, IIP growth, WPI inflation and trade deficit data for Jan-25. Of course, the USDINR, oil crude prices and also the key parameters like US bond yields, India bond yields and dollar index (DXY) will be tracked.
• For now, markets are all about Trump tariffs, so that will be one major focus area. With the first round of deportations, India may have a much larger problem on hand. Also, crude procurement from Russia is going to get tough as contracts are on hold.
• Key global data points. Core CPI, FOMC member speak, EIA crude stocks, IIP, Powell testimony, jobless claims, retail sales (US). New Loans (China); ECB Economic Bulletin, IIP growth, GDP (EU); BOE speak, GDP, IIP, Business Investments, Trade Balance (UK).

What does this mean for Nifty and Sensex in the coming week to February 14, 2025.

PARTING THOUGHTS ON MARKET INDEX LEVELS

For the coming week, there are 3 things to observe.

• During the week, VIX fell from 14.20 to 13.69 levels. While, 11-12 is where VIX is market accretive, this fall in VIX should help the Nifty to remain flat in a range.
• Nifty close of 23,560 comes at the end of an uncertain week. Going ahead, 23,750 and 24,000 will be the key resistance levels for the Nifty.
• There are mega IPOs like Hexaware and Lenskart coming to the Indian primary markets. The supply of quality paper should be a positive for markets.

The budget has not made any substantive difference, nor has the monetary policy. For now, the focus remains on global news flows; especially the Trump “America First” strategy.