Stock market this week: US-India trade deal, Q1 earnings, FIIs top triggers that may dictate Dalal Street

Mint

a day ago

The Indian stock market closed sharply lower on Friday, July 11, as escalating trade tensions between the US and its global partners, combined with a disappointing start to the Q1 earnings season, weighed heavily on investor sentiment.
The Sensex declined by 690 points, or 0.83%, to finish at 82,500.47, while the Nifty 50 dropped 205 points, or 0.81%, to settle at 25,149.85.
' Markets traded under pressure on Friday and lost over half a percent, dragged down by weak cues. The session began on a negative note following disappointing results from IT major TCS, which further worsened due to profit-taking in heavyweight stocks across other sectors. Sentiment remained subdued due to ongoing uncertainty around tariff-related issues and a weak start to the earnings season. As a result, the Nifty slipped below its first line of defense—the 20-day exponential moving average (20-DEMA)—disrupting the ongoing positive trend. We may now see a phase of consolidation in the index, with upcoming earnings keeping volatility high across sectors. In this environment, traders should exercise greater caution, focus on risk management, and be selective while identifying trading opportunities,' said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Markets declined over the week, slipping more than one percent, mainly due to ongoing uncertainty over global tariffs and a weak beginning to the earnings season. Although the sentiment stayed mostly steady during the first three sessions, profit booking in the later part of the week pulled the indices down.
Eventually, both the Nifty and Sensex settled near their weekly lows at 25,149.85 and 82,500.47, respectively.
According to Bajaj Broking Research, ' The index formed a sizable bear candle with a lower high and lower low signaling continuation of the corrective decline for the third session in a row. Market activity was largely stock-specific, awaiting concrete cues on both macro and micro fronts. Key observation on the daily chart is that the index has already taken 10 sessions to retrace just 38.2% of the previous 11 sessions up move (24,473-25669). A shallow retracement signals a positive structure and a potential higher bottom formation. Nifty has a crucial support zone between 24,900-25,100, marked by the confluence of the 50-day EMA, a previous breakout region, and key retracement levels of the recent uptrend. We anticipate the index to hold above this support zone and move higher towards the 25,500–25,600 range in the coming weeks. Therefore, we view the current dips as a buying opportunity.'
On the Bank Nifty outlook, brokerage firm Bajaj Broking said, ' Bank Nifty formed a bear candle with a lower high and lower low signaling continuation of the corrective decline for the second session in a row. The index on expected lines in the last six sessions is seen consolidating in the range 56,500-57,600. We expect the index to extend the same and only a move below 56,500 will signal extension of corrective decline towards key support area of 56,000-55,500. Key short-term term support is placed at 56,000–55,500 region, representing a confluence of the 50-day EMA and the key retracement level. The broader trend remains positive, and any dips should be viewed as buying opportunities.'
According to Bloomberg report, the US is aiming to finalize a temporary trade agreement with India that could lower its proposed tariffs to under 20%. Unlike several other countries that received formal tariff demand letters this week, India is not expecting such a notice. Instead, the trade deal is likely to be revealed through an official statement.
On Saturday, US President Donald Trump escalated the ongoing trade war by threatening to impose a 30% tariff on imports from Mexico and the European Union starting August 1.
The announcement, made via separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum on Truth Social, drew criticism from both regions. The EU and Mexico condemned the proposed tariffs as unfair and harmful, but reaffirmed their commitment to continue negotiating a comprehensive trade agreement with the US before the August deadline.
The earnings season has officially begun, with TCS reporting below-par results. As per the earnings calendar, more than 50 companies will be declaring their June quarter results next week.
The primary market will witness opening of three new public issues, including Anthem Biosciences IPO in mainboard segment and two others in SME segment.
Apart from new issues, the market will also witness six new listings in the upcoming week.
As per data from the NSE released on July 11, Foreign Portfolio Investors (FPIs) offloaded Indian equities worth ₹ 5,104 crore, while Domestic Institutional Investors (DIIs) made net purchases amounting to ₹ 3,558 crore.
Domestic institutional investors (DIIs) made equity purchases totaling ₹ 15,728.51 crore and sold shares worth ₹ 12,169.88 crore. In contrast, foreign portfolio investors (FPIs) bought stocks valued at ₹ 11,998.56 crore and sold holdings worth ₹ 17,102.78 crore.
So far this year, foreign institutional investors (FIIs) have remained net sellers, offloading equities worth ₹ 1.25 lakh crore, while DIIs have emerged as net buyers with total purchases amounting to ₹ 3.60 lakh crore.
" There are signs of FPI inflows weakening. After three months of positive inflows FPI has turned negative, though marginally, so far in July. FPI inflows into equity through stock exchanges in July up to 11th show a negative figure of ₹ 555 crores. (NSDL) This is the first negative inflow number after three months of positive inflows in April, May and June.
The first three months of this year FPI inflows were negative and this trend was reversed in the next three months.
An important trend in FPI investment is that FPIs have been consistent buyers/investors in the primary market even when they have been selling through the exchanges," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Oil prices climbed more than 2% on Friday after the International Energy Agency indicated that the market is tighter than it appears. Additionally, attention was on U.S. tariffs and the potential for more sanctions on Russia.
Brent crude futures increased by $1.72, or 2.5%, to close at $70.36 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by $1.88, or 2.8%, to settle at $68.45 per barrel.
Over the week, Brent recorded a 3% gain, and WTI rose approximately 2.2%. The September Brent contract traded at a premium of about $1.20 over the October contract.
According to Ajit Mishra – SVP, Research, Religare Broking Ltd, volatility is expected to persist amid global uncertainties and the unfolding earnings season.
Mishra said, ' Nifty slipped below its crucial short-term moving average—the 20-day EMA—and has entered the previous consolidation range of 24,500–25,200. This breakdown has disrupted the positive bias, potentially leading to extended consolidation. On the downside, the 24,500–24,900 zone will act as a key support area, while on the upside, 25,550 remains a critical hurdle in the event of a rebound, with major resistance at 25,750.'
The banking index continues to show resilience. However, mixed trends among private sector banking heavyweights are keeping participants uncertain about the next directional move.
' We expect the 55,100–55,900 zone to provide strong support in case of profit booking, while the previous swing high near 57,600 and 58,400 will act as resistance levels,' Mishra added.
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