Market outlook for the week (28-Jul to 01-Aug, 2025)

28 Jul 2025 , 11:13 AM

SECTORAL STORY FOR THE WEEK TO JULY 25, 2025

The week to July 25, 2025 saw Nifty and Sensex losing -0.53% and -0.36% respectively. During the week, FPIs were net sellers in Indian equities worth $(113) Million, but there is an element of caution ahead of August 01. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (25-Jul)	Index (18-Jul)
Nifty Healthcare	1.21%	14,846.30	14,668.30
Nifty Banks	0.44%	56,528.90	56,283.00
Nifty Private Banks	0.25%	27,604.15	27,534.50
Nifty India Digital	0.13%	8,951.35	8,939.35
Nifty Mobility	0.09%	20,966.40	20,948.25
Nifty Consumer Durables	-0.04%	38,617.05	38,630.75
Nifty Metals	-0.35%	9,425.10	9,458.20
Nifty Automobiles	-0.47%	23,781.55	23,894.35
Nifty Chemicals	-0.85%	30,747.37	31,009.81
Nifty Non-Banks	-1.47%	29,496.55	29,937.20
Nifty Infrastructure	-1.63%	9,066.50	9,216.90
Nifty CPSE	-1.66%	6,431.70	6,540.00
Nifty MNC	-1.97%	28,562.20	29,137.65
Nifty India Defence	-2.05%	7,996.45	8,163.40
Nifty PSU Banks	-2.22%	7,003.65	7,162.50
Nifty FMCG	-3.41%	54,579.95	56,506.90
Nifty Oil & Gas	-3.53%	11,356.40	11,771.90
Nifty Capital Markets	-3.79%	4,450.20	4,625.55
Nifty IT	-4.09%	35,623.75	37,141.85
Nifty Realty	-4.93%	950.60	999.90

Data Source: NSE

Out of 20 key sectors, only 5 sectors delivered positive returns and 15 gave negative returns for the week. The star themes were Healthcare and Banks, which held the markets. Big losers included Realty, IT, Capital Markets, Oil & Gas, and FMCG. Out of 5 gaining sectors, only 1 sector gained over 1%. A total of 5 sectors fell more than 3% this week.

Average returns of the 20 sectors stood at -1.52%. The top 5 sectors delivered 0.42% returns, while top 10 sectors gave returns of -0.11%. Bottom 10 sectors delivered -2.93%, showing lot of pressure on the downside. The uncertainty ahead of the tariff deadline has been pressuring several sectors oriented on consumer demand.

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

The Indo-UK trade deal came as a shot in the arm to Indian markets, although the impact may only be visible next week. IPO markets have been picking up and the NSDL IPO, opening on July 30, will add to the aura of IPO markets. In positive cues, ITC plans to invest ₹20,000 Crore in India, while Tata Sons plans to play a more operational role in IHCL. The tie up of Jio Financial with Allianz AG of Germany could redefine the contours of reinsurance in India.

On the downside, the Indo-US trade deal continues to be elusive, and looks unlikely before the August 01 tariff deadline. Core sector growth in Q1FY26 was just 1.34% hinting at a clear slowing down of investments. India continues to be exposed to the risk of punitive tariffs by the US for buying Russian oil, while a Reuters poll has suggested that the RBI may not cut rates in the August MPC. Bank NIMs have taken a hit in Q1 due to the 100 bps rate cut.

STOCK MARKET TRIGGERS FOR COMING WEEK TO AUGUST 01, 2025

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

• While the UK trade deal is done, the Indo-US trade deal continues to be elusive. That would be essential to placate the US and avoid the embarrassment of steep tariffs. The coming week could see action in the beneficiaries of the Indo-UK trade deal.
• The FOMC meets on July 30, 2025 for its Fed policy meet. FOMC members like Chris Waller have already called for a 25 bps rate cut to avoid the growth trap. It is likely that the Fed may cut rates by 25 bps to maintain a balance on the political front.
• India will see the June IIP and the June update of the fiscal deficit for FY26 announced this week. IIP has struggled and that may continue, looking at core sector growth. Also, fiscal deficit will normalize in June, after the RBI dividend effect in May 2025.
• Primary markets will see nearly ₹7,800 Crore being raised this week, dominated by the ₹4,012 Crore IPO of NSDL. Subscriptions will be closely watched, especially after the 147 times subscription received by the IPO of GNG Electronics Ltd on the mainboard.
• Key global data points. Fed meet, PCE Inflation, Q2-GDP, JOLTS, Atlanta Fed GDP, Trade Deficit, Initial Jobless Claims, and Fed Balance Sheet (US). Unemployment, GDP, CPI (EU); IIP, BOJ Policy (Japan); Composite PMI (China); Manufacturing PMI, HPI (UK).

What does this mean for Nifty and Sensex levels in the coming week to August 01, 2025.

PARTING THOUGHTS ON NIFTY AND SENSEX LEVELS

VIX tapered marginally this week from 11.39 to 11.28 levels, as global risks abated, but risks of secondary sanctions on India remain.

• Nifty closed the week at 24,837 Spot. Nifty has immediate support at 24,759 and major support at 24,555. Immediate resistance is at 24,963 and later at 25,167. Nifty remains a Short trade, unless it breaks above 25,101 with volumes. Longs only above that!
• Sensex closed the week at 81,463 Spot. Sensex has immediate support at 81,217 and major support at 80,546. Immediate resistance is at 81,889 and later at 82,561. Sensex remains a Short trade, till it breaks above 82,364 with volumes. Longs only above that!

The focus in the coming week would be on the outcomes of the Indo-UK trade deal, the colour of tariffs to be imposed by the US, and outcome of US Fed policy.