Quote on Market Wrap 30th August 2025 by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd
Below the Quote on Market Wrap 30th August 2025 by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd
Cautious Tone after Tariff Jitters; Data-Heavy Week Ahead
Market Summary
Markets ended the holiday-shortened week in the red, as sentiment was dampened by concerns over the impact of U.S. tariffs on Indian exports that came into effect during the week. The risk tone remained soft into the weekend, keeping headline indices under pressure and erasing much of the previous week’s gains.
Key Market Drivers
Tariff-related uncertainty dominated market sentiment, curbing risk appetite and overshadowing otherwise range-bound trading in a truncated week. However, Fitch’s affirmation of India’s sovereign rating with a stable outlook, alongside industrial production’s (IIP) growth accelerates to a four-month high, helped limit the pace of decline midweek.
Sectoral Snapshot
The tariff-driven narrative kept export-linked sectors in focus, but overall market breadth remained weak. Barring FMCG, all major sectors ended lower, with realty, financials, banking, and energy among the top laggards. Broader markets bore the brunt of the sell-off, with mid-cap and small-cap indices slipping between 3% and 4%.
Key Events to Watch
The upcoming week will be event-heavy, marking the start of a new month with several high-frequency indicators due for release. Investors will closely track auto sales data, along with HSBC Manufacturing, Services, and Composite PMIs. Additionally, the GST Council meeting will be a key focus, with expectations building around an accelerated implementation of proposed reforms following demands from industry bodies. These events are likely to set the near-term tone for risk sentiment.
Technical Outlook
The recent decline has dragged markets back toward their previous swing lows, erasing the prior weeks’ rebound. That said, strong support exists in the 24,250–24,350 zone, which could help arrest the fall and potentially trigger a recovery. On the upside, immediate hurdles are placed around the 24,650–24,750 range, defined by the 20-DEMA and 100-DEMA, while 25,000 remains the key resistance for the week.
The Bank Nifty, whose underperformance has been weighing heavily on overall market momentum, has slipped toward its long-term moving average, the 200-DEMA, near the 53,600 mark. Sustaining above this level will be crucial for any meaningful recovery; otherwise, the correction may extend towards the next support near 52,500.
Strategy Ahead
A cautious and balanced approach is advisable heading into the macro-heavy week. Investors should maintain exposure to quality companies with consistent earnings visibility, avoid aggressive leverage ahead of key data releases, and consider adding positions only after event-driven volatility subsides. In the near term, policy updates and geopolitical developments will remain critical swing factors.
Given the absence of clear sectoral leadership, a balanced strategy—combining defensives with select high-quality cyclicals—appears prudent, with positioning adjusted once greater clarity emerges from upcoming domestic and global indicators.
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