Dalal Street Weekly Outlook: US Fed Decision, India-US Trade Talks, Earnings to Set Market Mood
The Indian
stock market ended the week of July 25 on a sour note, continuing its downward
trend for a fourth consecutive week. Major indices, including the Sensex
and Nifty 50, posted notable losses, driven by weak Q1 earnings,
cautious global cues, and a lack of fresh buying interest from institutional
investors.
On Friday, the Sensex
slipped 786 points intraday, falling to 81,397.69, while the Nifty 50
dipped 1% to touch 24,806.35. Broader markets weren’t spared either mid-cap
and small-cap indices tumbled as much as 2%, underperforming the benchmarks.
Market Recap: Why Stocks Fell
Vinod Nair,
Head of Research at Geojit Financial Services, summed up the sentiment:
“The market
struggled under the weight of subpar earnings and global uncertainty. The
breach of key support levels reflects investor nervousness, particularly as
FIIs hold short positions.”
Sectors like IT
and financials led the decline, as muted guidance and concerns about asset
quality weighed on investor confidence. This is now prompting investors to
re-evaluate the rich valuations of Indian equities, raising the possibility of consolidation
or correction in the coming weeks.
Key Events & Triggers to Watch Next Week
The week ahead
could bring significant volatility, influenced by several domestic and
global developments. Here's what could move the market:
🇮🇳 🇺🇸 1. India-US
Bilateral Trade Deal in Focus
Amid the U.S.
reimposing tariffs on Indian exports, both countries are actively negotiating a
multi sector Bilateral Trade Agreement (BTA). The aim is to boost market
access, reduce tariff barriers, and enhance supply chain cooperation. If the
talks progress, it could provide a sentiment boost to export-oriented
sectors.
2. US Fed Meeting (July 29–30)
The Federal
Reserve's next interest rate decision will be crucial. Market participants are
betting on a status quo policy, with a 95% probability of no rate
change, according to the CME FedWatch tool. But any unexpected hawkish tone
could trigger FII outflows and a global equity selloff.
3. Q1 FY26 Earnings Season Peaks
Heavyweights
such as IndusInd Bank, Tata Steel, Asian Paints, Sun Pharma, and HUL are
scheduled to release earnings. Their performance will offer insights into
sectoral trends and could dictate near-term market direction, especially
for the Nifty 50 and sectoral indices.
4. Important Economic Data Releases
Key macro
indicators like:
- Industrial Production (IIP)
- HSBC Manufacturing PMI
...are expected on August 1. Strong numbers can lend support to bullish
investors; poor data may reinforce slowdown fears.
5. Auto Sales Numbers
Auto sector
stocks will be in the spotlight, as companies like Tata Motors, Maruti
Suzuki, and M&M release their monthly sales data. Positive figures
could drive sectoral momentum.
6. IPO Rush & New Listings
Fourteen new
IPOs (five mainboard + eight SME) will open for subscription. Additionally, 10
IPOs will be listed this week. High participation in quality IPOs may divert
liquidity from secondary markets in the short term.
7. FII-DII Activity
On July 25,
FPIs sold equities worth ₹1,980 crore, while DIIs bought ₹2,138 crore.
Year-to-date, FPIs have been net sellers to the tune of ₹1.43 lakh crore,
while DIIs have invested ₹3.84 lakh crore. FII mood remains a swing factor
for market trends.
8. Crude Oil & Gold Prices
Crude oil fell
to a 3-week low due to weak global data and rising supply, with Brent at
$68.44 and WTI at $65.16. Lower oil prices are generally positive
for India’s import bill.
Gold prices
also corrected due to a stronger dollar and easing geopolitical tensions,
closing around $3,335 per ounce.
Technical Outlook: What Charts Suggest
Nifty 50:
- Closed: 24,837
- Resistance: 25,100–25,250
- Support: 24,500–24,460
- Strategy: Sell on bounce until 25,250 is reclaimed
Bank Nifty:
- Closed: 56,529
- Key Support: 56,200; Major: 55,500
- Resistance: 57,320
Strategy: Range-bound; watch for breakout above 57,320 or breakdown
below 56,000
According to
Hrishikesh Yedve (Asit C. Mehta) and Ajit Mishra (Religare Broking), both
indices are in a short-term bearish trend, and traders are advised to
stay cautious.
Investment Advisory (with Human Touch)
While
short-term sentiment is clearly under pressure, long-term investors should
focus on quality stocks with strong earnings visibility. Here's what you
can do:
“Volatility
is the price of admission for superior returns. Use it wisely, not fearfully.”
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