Nifty Weekly Wrap: Volatility, Realty Surge, Tariffs

The Indian equity markets ended the week on a mixed note, with Nifty50 declining by 0.67% to close at 24,853, and BankNifty showing resilience with a marginal gain of 0.08%, ending at 55,398. The week was a turbulent one, marked by alternating sessions of sharp declines and quick rebounds as global tensions, sector-specific developments, and earnings reports swayed investor sentiment.

Let’s take a closer look at what shaped the markets this week and what lies ahead.

1. Nifty50: Range-Bound Amid Global and Domestic Triggers

The Nifty50 index reflected the indecision in market participants’ minds. The index hovered within a defined range, oscillating between bullish pullbacks and bearish profit-booking. While there was no sustained trend, intraday movements remained volatile.

Weekly Performance Highlights:

• Weekly change: -0.67%

• Closing Level: 24,853

• Resistance (Next Week): 25,200

• Support (Next Week): 24,400

Drivers of Volatility:

• Global economic uncertainty, especially triggered by geopolitical tensions and trade rhetoric from the U.S.

• Foreign Portfolio Investor (FPI) outflows, with net selling of ₹4,784.32 crore during the week.

• Mixed quarterly earnings, with heavyweight results failing to create decisive directional movement.

• Sector-specific moves that saw sharp divergences between outperformers and laggards.

Despite the lack of a definitive trend, the market witnessed short-covering rallies in mid-week sessions, only to lose gains toward the end, reflecting underlying caution.

2. BankNifty: PSU Banks Shine in a Choppy Week

The BankNifty index fared slightly better, thanks to outperformance by Public Sector Undertaking (PSU) banks. Although the private banking segment remained under pressure, PSU banks provided a floor to the index.

Weekly Performance Highlights:

• Weekly change: +0.08%

• Closing Level: 55,398

• Resistance (Next Week): 56,200

• Support (Next Week): 54,500

While volatility remained a dominant theme, rotational buying interest and relative strength in PSU banking counters offered pockets of stability. That said, absence of any major triggers from global banking cues or RBI announcements kept participation subdued.

3. Sectoral Performance: Realty Shines, Auto Slumps

Best Performing Sector: Nifty Realty

The Nifty Realty index emerged as the top gainer of the week. Buoyed by strong earnings, healthy booking numbers, and macro tailwinds like improved urban housing demand, realty stocks saw broad-based buying.

Major Gainers:

With RBI keeping interest rates steady and mortgage rates staying relatively low, developers are expecting a strong FY26. The optimism was visible in investor appetite.

Worst Performing Sector: Nifty Auto

In stark contrast, Nifty Auto underperformed significantly due to weak demand outlook, margin pressures, and profit-booking.

Major Losers:

Analysts attributed the decline to concerns over rising input costs, slowing rural demand, and heightened competition in the electric vehicle (EV) segment.

4. Key Corporate and Macroeconomic Developments

Ex-Dividend Announcements:

A slew of blue-chip companies are slated to trade ex-dividend in the coming week. These include:

• Angel One

• Bajaj Finance

• ITC

• Tata Consumer Products

• L&T Finance

• Infosys

• Colgate Palmolive (India)

Investors are advised to watch these counters for potential volatility around the record dates.

NTPC Q4 FY25 Results:

State-run energy major NTPC posted impressive results for Q4:

• Total Income: ₹51,085.05 crore

• YoY Growth: From ₹48,816.55 crore in Q4 FY24

• Revenue from Generation: ₹49,352.99 crore vs. ₹47,088.70 crore YoY

The robust performance was led by higher electricity demand and improved operational efficiency. NTPC remains a stable dividend-yielding stock and a favorite among defensive investors.

5. FPI Activity: Continued Caution in May

Foreign Portfolio Investors (FPIs) turned net sellers this week, offloading equities worth ₹4,784.32 crore. This brings the net FPI inflows for May down to ₹13,835 crore, indicating a cooling off in overseas interest amid global volatility.

Factors driving FPI caution include:

• U.S. rate uncertainty

• Strengthening of the dollar index

• Trade tensions between the U.S. and EU

• Weak Chinese data and global supply chain worries

While India remains a favored destination on a long-term basis, short-term positioning remains cautious.

6. Global Influence: Tariff Tensions Return to the Forefront

Former U.S. President Donald Trump’s aggressive trade stance added another layer of unease to global markets. His announcements this week included:

• A 25% tariff threat on Apple, calling out its reliance on Chinese components.

• Warnings to Samsung and other global tech giants.

• Rejection of any trade deal with the European Union, even floating a 50% tariff on imports.

These comments come amid the U.S. election season and are likely aimed at appealing to domestic manufacturing interests. However, they risk escalating trade wars, which could disrupt global equity markets and supply chains.

7. U.S. Steel and Nippon Steel Deal: Industrial Boost

In positive global industrial news, U.S. Steel announced it will continue to operate from Pittsburgh, USA, under a joint venture with Nippon Steel. Key highlights include:

• 70,000 new jobs to be generated

• $14 billion in investments over 14 months

• Focus on modernizing domestic steel infrastructure

This deal reflects strong U.S.-Asia industrial collaboration and could bolster demand in the capital goods and metals sectors globally, including India.

8. Technical Outlook for the Coming Week

Nifty Technical View:
A decisive breakout above 25,200 could resume upward momentum, while a breach below 24,400 may trigger a deeper correction toward 24,000.

BankNifty View:
Sustained strength in PSU banks may lead the index toward 56,000+, but watch for private bank drag.

Volatility Outlook:
Expect volatility to remain elevated due to global economic events, ex-dividend reactions, and monthly expiry pressures.

9. Investment Strategy: What Should Investors Do?

Given the current macro and micro conditions, here are some key strategies:

• Stay cautious on auto and discretionary sectors until demand clarity emerges.

• Prefer defensive sectors like FMCG, IT, and utilities for short-term protection.

• Accumulate quality real estate and PSU banking names on dips.

• Avoid over-leveraged trades ahead of expiry and global macro events.

• Monitor ex-dividend stocks for arbitrage and dividend capture opportunities.

Conclusion: Markets Seek Direction Amid Noise

The week gone by was marked by choppiness, divergence, and indecision. From global trade war rhetoric to quarterly earnings and sectoral rotations, investors had to navigate a labyrinth of triggers. While the Nifty50 ended in the red, BankNifty’s resilience and Realty’s surge offered some relief.

Going forward, clarity on U.S. trade policy, FPI stance, and corporate guidance from dividend-declaring firms will be crucial in shaping market direction.

With volatility expected to remain high, a disciplined, sector-rotated approach with close attention to global developments is advised.

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