Stock Market Ends Week In Red Amid Trade Deal Uncertainty, Profit Booking

Indian equity markets ended the week in the red, with benchmark indices Sensex and Nifty each losing 0.7 per cent amid growing caution ahead of the upcoming July 9 US-India trade deadline and the onset of the corporate earnings season. Investor sentiment remained subdued through the week, despite a strong opening on Monday that hinted at bullish momentum.

The Nifty closed the week at 25,461, while the Sensex settled at 83,432.89. Early optimism faded as investors reassessed risks around potential delays in trade negotiations and awaited corporate earnings data for further cues.

Hope Of Interim Trade Deal Limits Losses

Despite the overall decline, reports suggesting a possible interim agreement between India and the US helped prevent a deeper sell-off in the latter half of the week. Market experts said this development offered some short-term relief to nervous investors.

Ajit Mishra, SVP – Technical Research at Religare Broking, attributed the market weakness to profit booking. “The cautious tone was evident with the looming trade deadline. However, optimism around a potential agreement between India and the US acted as a cushion,” he noted, reported IANS.

Macro Indicators Offer Support

On the macroeconomic front, India’s fiscal position remained strong. A substantial dividend transfer of Rs 2.69 lakh crore from the Reserve Bank of India helped contain the fiscal deficit to just 0.8 per cent of the annual target. Additionally, GST collections in June stood at Rs 1.84 lakh crore, marking a 6.2 per cent year-on-year increase, offering further support to the economy.

Vinod Nair, Head of Research at Geojit Financial Services, observed that the markets were taking a breather after a sharp rally in previous weeks. “Global cues remained mixed, and investors preferred to stay on the sidelines ahead of the US tariff decision. FIIs turned cautious due to high valuations, but support from DIIs kept the market from falling sharply,” he said.

Sectoral Trends And Technical Outlook

Sector-wise, defensives such as IT and healthcare outperformed, benefiting from stable demand and stock-specific momentum. In contrast, rate-sensitive segments like banking, auto, and realty faced selling pressure due to profit booking. FMCG stocks also ended lower. Meanwhile, defence stocks witnessed strong buying interest following government approval of several high-value contracts.

Technically, the markets appear to have entered a consolidation phase. Bajaj Broking Research reported that Nifty formed a small bearish candle with a higher high and low on the weekly chart, indicating consolidation with stock-specific activity.

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