Market outlook for the week (16-Jun to 20-Jun, 2025)

16 Jun 2025 , 09:47 AM

SECTORAL STORY FOR THE WEEK TO JUNE 13, 2025

The week to June 13, 2025 saw Nifty and Sensex losing -1.14% and -1.30% respectively. During the week, FPIs were net buyers in Indian equities worth $391 Million; but the real risk to markets came from Israeli attacks on Iran. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (13-Jun)	Index (06-Jun)
Nifty IT	3.15%	38,469.25	37,294.85
Nifty Healthcare	1.53%	14,328.65	14,112.95
Nifty Oil & Gas	-0.03%	11,443.60	11,446.90
Nifty India Digital	-0.11%	8,987.75	8,997.80
Nifty CPSE	-0.31%	6,529.50	6,550.05
Nifty Chemicals	-0.62%	30,618.12	30,809.22
Nifty Private Banks	-1.09%	27,527.90	27,832.50
Nifty Infrastructure	-1.20%	8,971.95	9,081.15
Nifty MNC	-1.28%	28,184.30	28,550.70
Nifty Automobiles	-1.41%	23,327.40	23,661.30
Nifty India Defence	-1.43%	8,791.60	8,919.20
Nifty Metals	-1.57%	9,258.80	9,406.45
Nifty Banks	-1.86%	55,527.35	56,578.40
Nifty Non-Banks	-1.96%	29,702.45	30,295.25
Nifty Consumer Durables	-2.05%	36,726.65	37,495.35
Nifty Mobility	-2.21%	20,258.50	20,716.85
Nifty FMCG	-2.28%	54,527.15	55,802.00
Nifty PSU Banks	-2.33%	6,934.85	7,100.30
Nifty Realty	-3.13%	1,007.05	1,039.60
Nifty Capital Markets	-4.28%	4,436.30	4,634.70

Data Source: NSE

Out of 20 key sectors, only 2 sectors gave positive returns with the other 18 sectors giving negative returns. The positive theme was dollar defensives against rupee weakness; IT and Healthcare. Big losers in the week were Capital Markets, Realty, PSU Bank, and FMCG. Out of the 18 losing sectors, 6 sectors fell more than 2%.

Average returns of the 20 sectors stood at -1.22%. The top 5 sectors delivered 0.84% returns, while top 10 sectors gave average returns of -0.14%. The bottom 10 sectors delivered -2.31% on average. Despite lower headline inflation at 2.82%, negative sentiments were triggered by the Boeing 787 Dreamliner crash and Israeli attacks on Iran.

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

In a week deluged by negative news, there were two key positives. Firstly, the consumer inflation for May 2025 came in sharply lower at 2.82%, well below the RBI average target of 4.0%. Food inflation fell to 0.99%, showing mandis being well supplied. Secondly, there was finally clarity on SIP stoppage ratio with the ratio falling from 353% to 72% post the massive dormant folio clean-up. Ratio of contributing SIP folios touched 94.5% in May 2025.

However, the week was dominated by negative news flows. A Boeing 787 Dreamliner bound to Gatwick, crashed immediately after take-off from Ahmedabad. There was just one survivor; and it led to a crash in airline stocks and possible spike in aviation premiums. The bigger news on Friday was Israel attacking key nuclear installations in Iran. This is likely to worsen geopolitics in the West Asia, and it was evident in the 8% spike in crude oil prices.

STOCK MARKET TRIGGERS FOR COMING WEEK TO JUNE 20, 2025

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

• There are big data points for India. The WPI inflation and the core sector growth for May 2025 will be announced in the coming week. In addition, the trade deficit for May will also be put out, with the tariff war likely to have the impact of widening the deficit.
• The markets will be closely tracking the minutes of the RBI MPC this week. Ideally, the markets will look for clues on further rate cuts and would also try to understand why one MPC member, Saugata Bhattacharya, voted against the 50 bps rate cut.
• The US Fed will announce its June policy statement next week. While rate cuts are ruled out, language will be key. Markets will also be keenly watching the quarterly update on long term and medium term macro projections on inflation, GDP, and unemployment.
• Amidst all these data flows, the big focus area next week will be on how the Israel-Iran war pans out. While one hopes it does not worsen, the immediate concern for India would be the impact on oil supplies and the price of crude oil.
• Key global data points. OPEC Monthly, Core Retail Sales, Fed Projections, IIP, Business Inventories, Crude Stocks, Jobless Claims, Housing Starts (US). Wages, CPI (EU); BOJ Policy, CPI, Trade Surplus (Japan); IIP, Fixed Asset Investments (China); and CPI, BOE Rates (UK).

What does this mean for Nifty and Sensex levels in the coming week to June 20, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX bounced from 14.3 levels to 15.1, as the Iran-Israel war compounded the geopolitical risks. This could lead to VIX spiking further.

• Nifty closed the week at 24,719 Spot. Nifty has immediate support at 24,543 and major support at 24,262. Immediate resistance is at 24,824 and later at 25,106. Nifty remains a short trade, unless it breaks above 24,882 with volumes. Longs only above that!
• Sensex closed the week at 81,119 Spot. Sensex has immediate support at 80,569 and major support at 79,685. Immediate resistance is at 81,453 and later at 82,337. Sensex remains a shirt trade, till it breaks above 81,666 with volumes. Longs only above that!

The coming week has some big data numbers like the MPC minutes, current account deficit announcement, Fed policy statement, Fed update on macros etc. However, what will truly dominate the market sentiments are the repercussions of the Israel Iran stand-off. For India, the risk may be all about crude oil prices.