Will Sensex and Nifty Sustain Their Gains Amid Tariff Worries?
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Synopsis
In a week marked by geopolitical tensions, the Indian market indices ended with a remarkable 1% rise, breaking a six-week losing streak. As investors eye crucial global meetings, domestic factors like S&P’s credit rating upgrade and low inflation are adding positive sentiment.
Key Takeaways
- Indian benchmark indices gained 1% this week.
- Focus on Trump-Putin meeting for potential tariff resolutions.
- Nifty IT index led gains while broader markets struggled.
- Domestic inflation is at an eight-year low.
- S&P upgraded India's credit rating to BBB.
Mumbai, Aug 15 (NationPress) The Indian benchmark indices have closed the week on a positive note, achieving a 1% increase despite lingering geo-political concerns, successfully breaking a six-week losing streak.
Market participants are now turning their attention to the upcoming meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska, hoping it may lead to a ceasefire in Ukraine and the removal of the additional 25% tariff imposed on India.
The Nifty IT index was the star performer this week, whereas the Nifty Metal and Nifty FMCG indices ended lower. Broader market indices, including the Nifty Midcap and Nifty Smallcap, faced challenges and concluded in negative territory.
With the June quarter (Q1 FY26) earnings now released, there has been a moderation in revenue, resulting in average net profit growth year-on-year for the benchmark Nifty 50 companies (excluding financials and oil and gas) tapering to mid-single digits.
On the earnings side, the Nifty50 Q1 FY26 results were largely in line with market forecasts. The overall performance showed a mixed trend, with a revival from urban demand still pending.
Vinod Nair, Head of Research at Geojit Investments Limited, noted, "The healthcare sector and PSU banks excelled due to robust earnings and stable asset quality."
"With domestic inflation at an eight-year low, there are growing expectations for a rebound in discretionary spending. Furthermore, S&P’s upgrade of India’s sovereign credit rating to BBB is anticipated to enhance investor sentiment and foster long-term growth," he added.
"Global cues are favorable, supported by softer US inflation data and a decline in the US 10-year bond yield, which reflects confidence in an impending Fed rate cut during the September policy meeting," he noted.
The Nifty index is projected to fluctuate within the 24,350–24,750 range, with a substantial breach beyond 24,750 likely to propel a rally toward the crucial psychological mark of 25,000.
On Thursday, foreign institutional investors (FIIs) net sold equity shares valued at Rs 1,926 crore, having acquired stocks worth Rs 13,646 crore while offloading shares amounting to Rs 15,572 crore. Conversely, domestic institutional investors (DIIs) net purchased equities worth Rs 3,895 crore, with gross purchases totaling Rs 13,144 crore against sales of Rs 9,248 crore.
Point of View
I emphasize that while the recent gains in the Indian stock market are encouraging, the ongoing geopolitical uncertainties deserve prudent evaluation. The focus on global developments and domestic economic factors reflects a complex landscape that requires careful navigation.
NationPress
19/08/2025
Frequently Asked Questions
What drove the rise in Sensex and Nifty this week?
The rise was primarily driven by investor optimism surrounding potential geopolitical resolutions, particularly the upcoming meeting between Trump and Putin, as well as positive domestic economic indicators.
How did the Nifty IT index perform this week?
The Nifty IT index led the gains during the week, highlighting strong performance in the technology sector amid broader market fluctuations.
What impact did the S&P credit rating upgrade have?
The S&P upgrade to BBB for India's sovereign credit rating is expected to bolster investor confidence and support long-term market growth.
What is the outlook for the Nifty index moving forward?
The Nifty index is expected to trade within the 24,350 to 24,750 range, with a decisive move above 24,750 potentially pushing it towards the 25,000 mark.
How did foreign and domestic investments compare this week?
FIIs net sold equities worth Rs 1,926 crore, while DIIs net purchased shares worth Rs 3,895 crore, indicating differing sentiments among institutional investors.
