Nifty Outlook: How US Tariffs Dented Indian Stock Market Sentiment This Week (July 28 – Aug 1, 2025)
- Stay Informed With Sanil | Sanil Pinto
- Aug 2
- 4 min read
Updated: Aug 3
Indian Stock Market Weekly Overview – Nifty Outlook Turns Cautious
The Indian stock market had a rough ride during the week ending August 1, 2025, with Nifty Outlook turning bearish. The Nifty 50 slipped by 0.82% to close at 24,565.35, while the Sensex lost 586 points to finish at 80,599.91.
What triggered this slide? Two words: US Tariffs. President Trump’s surprise announcement of a 25% tariff on Indian goods, effective August 7, sent shockwaves through export-heavy sectors, pressuring risk sentiment. Add to that continued FII selling and weak global cues, and you get a perfect recipe for short-term caution.
Nifty Outlook, Technical View – Key Nifty Support & Resistance Levels to Watch
Nifty Outlook for the Week Ahead
Immediate support: 24,400
Resistance zone: 24,800–25,000
A decisive close above 25,000 is now essential to reverse bearish momentum.
The Nifty 50 broke crucial support at 24,750, finishing the week well below the comfort zone. Until the index stabilizes above 25,000, market tone remains vulnerable.
Bank Nifty Outlook
Major support: 55,900
Key resistance: 56,800
Bank Nifty also underperformed this week, with sector breadth turning decisively negative.
Volatility Check – India VIX
Although India VIX ticked higher, it stayed under 13. That suggests a rise in uncertainty but no outright panic… yet.
Nifty Outlook: FII/DII Flows – FIIs Hit the Sell Button Hard
Foreign Institutional Investors (FIIs) extended their selling streak for a ninth consecutive session, offloading a net ₹5,600 crore on August 1 alone. Clearly, the US tariff announcement rattled global funds, and the risk-off move was swift.
Domestic Institutional Investors (DIIs) did try to lend support, but their inflows weren’t enough to offset the relentless selling pressure.
Market Breadth in Focus
Only 11 of the Nifty 50 stocks managed to close in the green. The advance-decline ratio was firmly in the red, showing clear signs of defensive rotation and fading risk appetite.
Nifty Outlook: Sector Performance – Who Won, Who Lost This Week
Top Performing Sectors:
FMCG: Gained ~0.8% thanks to stocks like ITC and Asian Paints, proving again that defensives are the go-to in uncertain times.
Media: Showed resilience as investors favored domestic demand-driven plays with low correlation to global trade.
Underperforming Sectors:
Pharma: Slumped 3.4% as US policy directly threatened Indian drug exporters.
IT, Metals, Oil & Gas: All fell over 1% due to FII outflows, weak global cues, and potential secondary sanctions.
Export-centric industries—textiles, chemicals, select auto parts—also saw sharp downgrades as analysts began cutting earnings estimates for the upcoming quarters.
Nifty Outlook: Value Picks – Stocks That Look Attractive Post-Correction
HDFC Life
Down ~15% from recent highs, HDFC Life now offers strong value. It’s a fundamentally sound play, though global uncertainty is a short-term overhang.
ITC
A classic defensive, ITC is seeing accumulation even during broader market weakness. Stable earnings and consistent cash flows make it a low-volatility pick
Global Cues Impacting Nifty Outlook
This week’s biggest shocker was Trump’s 25% tariff on Indian goods, set to kick in from August 7. This move ignited a global risk-off sentiment, especially in emerging markets like India.
US CPI held steady at 3.1%, giving the Fed no immediate reason to hike or cut.
Crude oil stayed at $86/barrel, offering no relief on the inflation front.
USDINR hovered at ₹85.25, with a weakening bias due to rising trade risks.
Wiremesh Watchlist – Portfolio Highlights
Infosys
Fell 3%, highlighting how IT remains vulnerable to extended trade tensions and FII exits.
Trent
Gained 3.2% – a clear bright spot this week.
SBI Card
Saw a volume spike but failed to break out as global caution and foreign selling held it down.
What to Watch in the Week Ahead
Nifty Outlook Range: Support at 24,400, resistance at 24,800
Tariff Watch: August 7 is D-Day for India–US trade.
RBI Policy: Likely to influence financial stocks and Bank Nifty.
Corporate Earnings (Q1): May trigger sector-specific moves.
FIIs Flow: Keep an eye on whether the selling slows or intensifies.
Week Ahead – Nifty Outlook Remains Cautious
Until Nifty decisively crosses above 25,000, the market remains in consolidation-to-correction mode. The trade war news has triggered a wave of risk aversion, and export-heavy sectors are likely to remain under pressure.
Defensives like FMCG and Media are showing signs of strength, and stock-picking becomes critical in a market where broad trends are weakening.
What’s Your Nifty Outlook?
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Sanil Pinto - Stay Informed With Sanil
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Disclaimer
This article is for informational purposes only and does not constitute investment advice. Investing in shares carries significant risk, including loss of capital, illiquidity, and valuation uncertainty. Readers are strongly encouraged to consult a SEBI-registered financial adviser before making any investment decisions. The information provided is based on publicly available data and sources believed to be reliable as of the date indicated, but may change without notice.
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