Indian benchmark indices are likely to kick-off the week on a muted note amid muted action in the global and Asian peers. Sentiments at Dalal Streets remain jittered after posting a sixth straight weekly loss due to uncertainty over US tariffs on goods. Muted earnings from India Inc also soured the mood of traders.
Nifty futures on the NSE International Exchange traded 7.60 points, or 0.03 per cent, down at 24,433.50, hinting at a muted start for the domestic market on Monday. Major share indices crept higher in Asia on Monday. KOSPI and Hang Seng were trading flat, while Shanghai rose slightly higher.
Indian markets are expected to remain cautious, with the recently imposed US tariff on Indian exports keeping pressure on export-linked sectors, said Puneet Singhania, Director at Master Trust Group. “While the tariff may not significantly impact India’s broader economic growth, investor sentiment could remain fragile in the near term, ” added.
US stocks ended higher and the Nasdaq notched a record closing high for the second straight day on Friday. The Dow Jones Industrial Average rose 206.97 points, or 0.47 per cent, to 44,175.61, the S&P 500 gained 49.45 points, or 0.78 per cent, to 6,389.45 and the Nasdaq Composite jumped 207.32 points, or 0.98 per cent, to 21,450.02.
In commodity markets, gold dipped 0.3 per cent to $3,386 an ounce after wild swings last week. Oil prices slipped amid risks the talks between Trump and Putin could make progress to a ceasefire in Ukraine and possibly an eventual easing of sanctions on Russian oil exports. Brent dropped 0.6 per cent to $66.22 a barrel, while US crude eased 0.7 per cent to $63.44 per barrel.
The US dollar stabilised on Monday after last week’s losses, as markets await Tuesday’s key US CPI report for July and focus on developments in trade talks between Washington and Beijing ahead of a deadline to avoid the imposition of higher tariffs. The dollar index stayed steady at 98.246 after slipping 0.4 per cent last week.
Near-term market direction will be shaped by clarity on US tariff implementation, India’s diplomatic response, and incoming inflation readings. A sustained breach of key supports could accelerate profit-taking, particularly in trade-sensitive and export-oriented sectors, said Ajit Mishra, SVP of Research at Religare Broking. Investors may adopt a defensive-to-neutral stance, he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 7,723.66 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 1,932.81 crore on a net-net basis. FPIs have pulled out nearly Rs 18,000 crore from Indian equities so far this month.
President Trump’s tariff tantrums imposing 25 percent tariff on Indian goods and an unspecified penalty for trade with Russia impacted market sentiments in the short-term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “The sharp appreciation in the dollar index to 100 is another negative which can impact FPI inflows in the near-term,” he said.
Nifty outlook
Nifty50 closed below the crucial support level of 24,400, highlighting the strength of the bears. Sentiment was already tilted in favour of the bears, forming a lower-top, lower-bottom pattern, said Rupak De, Senior Technical Analyst at LKP Securities. “The short-term trend remains weak, with potential downside towards 24,150–24,200. On the higher side, resistance is seen at 24,475–24,500.”
A long bear candle was formed that completely negated the bullish sentiment created on Thursday. A long negative candle has been formed on the weekly chart, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. “The underlying trend of the Nifty continues to be weak. The next lower levels to be watched are around 24200-24000 by next week. Any pullback up to the hurdle of 24,500 could be a sell on rise opportunity.”
Nifty Bank outlook
Nifty Bank ended the week on a negative note, reflecting continued weakness in the financial space. On the weekly chart, it formed a bearish candle, indicating persistent selling pressure. Over the last two sessions, the index has been hovering near its 100-day EMA, said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
“Going forward, the 100-day EMA zone of 54,950–54,850 will be a critical support area. A sustained move below 54,850 could intensify the downtrend, opening the gates for a decline toward the next support zone of 54,000–53,900. On the upside, any recovery is likely to face resistance near 55,700–55,800, which now acts as a key hurdle for the bulls,” he said.
Bank Nifty is positioned at a crucial juncture near its immediate support zone of 54,800–54,900. If this support holds, a relief rally could unfold, supported by oversold technical indicators, said Choice Broking. “From a technical standpoint, the index is taking support at the 20-EMA and is currently retesting the critical 54,900–55,000 zone,” it said.
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