Indian stock markets end week lower amid trade deal concerns, profit booking

Mumbai: Indian equity markets ended the week on a subdued note, dragged down by investor caution ahead of the July 9 US-India trade deadline and the start of the Q1 corporate earnings season. Both benchmark indices — Sensex and Nifty — declined by 0.7% each, reflecting global uncertainty and profit booking after a strong rally.

Sensex and Nifty Close Lower Despite Early Week Breakout

The Nifty 50 closed at 25,461, while the BSE Sensex settled at 83,432.89. Despite starting the week on a strong note, momentum waned due to fears of a delay in finalizing trade agreements between India and the United States.

“The cautious tone was evident with the looming trade deadline,” said Ajit Mishra of Religare Broking. “However, optimism around a potential interim trade deal acted as a cushion.”

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RBI Dividend and Strong GST Collection Support Fiscal Stability

Investor sentiment received some relief from domestic macro indicators:

• RBI Dividend Transfer: ₹2.69 lakh crore helped keep fiscal deficit at just 0.8% of the annual target
• GST Collections: Rose 6.2% YoY in June to ₹1.84 lakh crore

These figures reflected strong fiscal health, even as market volatility persisted.

FIIs Turn Cautious, But DIIs Provide Support

According to Vinod Nair, Head of Research at Geojit Financial Services:

“The market witnessed consolidation after recent gains. Global cues were mixed, and investors chose to remain on the sidelines ahead of the US tariff decision.”

Foreign Institutional Investors (FIIs) adopted a cautious stance due to high valuations, though support from Domestic Institutional Investors (DIIs) helped cap deeper losses.

Sectoral Performance: IT, Healthcare Shine While Auto, Banking Lag

Gainers:

• IT and Healthcare stocks outperformed, driven by stock-specific action and consistent demand.

Losers:

• Rate-sensitive sectors like banking, auto, and realty came under pressure due to profit booking.
• FMCG stocks also edged lower amid valuation concerns.
• Defence stocks, however, gained sharply after the government approved major new contracts.

Technical View: Markets Enter Consolidation Phase

Technical experts believe the market is currently in a consolidation phase after its recent sharp uptrend.

“Nifty formed a small bear candle with a higher high and low, suggesting consolidation with stock-specific action,” said analysts at Bajaj Broking.

According to Angel One:

• Support levels: 25,150–25,200 (20-day EMA)
• Resistance zone: 25,600–25,740
• A breakout above 25,740 may signal the next leg of the rally