Market outlook for the week (21-Apr to 25-Apr, 2025)

21 Apr 2025 , 10:35 AM

SECTORAL STORY FOR THE WEEK TO APRIL 18, 2025

The week to April 18, 2025 saw Nifty and Sensex showing strong gains of +4.48% and +4.52% respectively. During the week, FPIs were net buyers in Indian equities to the tune of $990 Million; albeit a truncated week. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (18-Apr)	Index (11-Apr)
Nifty Realty	6.95%	845.10	790.15
Nifty Private Banks	6.94%	27,149.75	25,388.20
Nifty Banks	6.45%	54,290.20	51,002.35
Nifty PSU Banks	5.69%	6,522.50	6,171.30
Nifty Capital Markets	5.56%	3,572.00	3,384.00
Nifty India Defence	5.33%	6,603.05	6,268.70
Nifty Non-Banks	5.24%	27,423.55	26,058.45
Nifty Mobility	4.65%	18,839.95	18,002.70
Nifty Infrastructure	4.64%	8,632.80	8,250.15
Nifty Oil & Gas	4.19%	10,692.20	10,262.55
Nifty Automobiles	4.01%	21,373.10	20,548.65
Nifty Metals	3.77%	8,476.50	8,168.30
Nifty India Digital	3.70%	8,107.50	7,818.10
Nifty Consumer Durables	3.20%	37,240.30	36,085.30
Nifty Chemicals	3.11%	28,843.87	27,974.31
Nifty MNC	3.09%	26,703.95	25,903.45
Nifty Healthcare	2.88%	13,711.05	13,326.65
Nifty CPSE	2.81%	6,237.40	6,066.80
Nifty IT	1.93%	33,372.35	32,740.85
Nifty FMCG	1.67%	56,674.20	55,741.10

Data Source: NSE

Out of 20 sectoral indices all the 20 sectors gave positive returns. Banks and financials were the big gainers on a gradual shift back to domestic plays amidst the tariff uncertainty. While IT and FMCG were subdued, banks and financials dominated the week. The India-oriented sectors dominated, with Realty, Banks, Capital Markets, Defence, and Infrastructure among the gainers during the week. Gains in IT were subdued due to relatively weak Q4 results from TCS, Infosys and Wipro. Dollar index weakness also added to the IT woes.

Overall, average returns of the 20 sectors stood at 4.29%. The top 10 sectors gave an average return of 5.56%, while the bottom 10 sectors delivered average returns of 3.02%, exhibiting low dispersion. A total of 16 sectors gained more than 3% for the week, with 3 sectors gaining over 6%, and 7 sectors gaining over 5% for the week. Only IT and FMCG saw weekly returns of less than 2% for the week.

WEEK THAT WAS; THE GOOD, THE BAD AND THE UGLY

One factor that was a major boost for the market this week was hopes of a possible trade deal between the US and EU. That would be a boost to world trade. Consumer inflation came in sharply lower at 3.34%, paving the way for another rate cut in June. IMD has assigned 89% probability to above average rainfall this year, which is positive for Kharif cropping. Also, controlled overall trade deficit, promises to keep FY25 CAD in check.

Of course, the big risk on the downside was the IT results disappointing the street with lower profits and weak guidance. That is likely to remain an overhang. Also, while the WPI inflation was lower in March at 2.05%, the manufacturing WPI continues to rise, which is not good for OPMs of Indian corporates. Even as the rupee gained from the weak dollar index (DXY), the price of crude spiked by over 5% this week on the US-EU trade deal hopes.

STOCK MARKET TRIGGERS FOR COMING WEEK TO APRIL 25, 2025

Here are key triggers that could influence stock markets next week.

• With the VIX falling back from a high of 23.30 to 15.47 this week, the short term risks are likely to be subdued. However, for the markets to turn “buy on dips,” it is essential for the VIX to get closer to the 12 levels. As of now risk is still being priced in.
• The RBI MPC minutes will be published on Wednesday. Markets will look at the minutes for cues on the trajectory of interest rates. As of now, the sharp fall in inflation and weak GDP signals, have already opened the doors for another 25 bps rate cut in June 2025.
• As the stand-off between Trump and Jerome Powell heats up on rates, Jerome Powell had again red-flagged stagflation risks last week. In the coming week, markets will track the speeches of Patrick Harker and Neil Kashkari for clues on rate trajectory.
• The coming week will be the week of big Q4FY25 results. Apart from HDFC Bank and ICICI Bank; other key companies like HCL Tech, HUL, Havells, Axis Bank, Nestle India, Bajaj Housing, Yes Bank, Tata Communications and Persistent will put out Q4 results.
• Key global data points. Fed speak, Crude inventories, Composite PMI, New home sales, Initial jobless claims, and Durable goods orders (US). ECB Speak, PMI, Trade (EU); BOJ Core CPI, PMI (Japan); PBOC Loan Rates (China); and PMI, Retail Sales (UK).

What does this mean for Nifty and Sensex in the coming week to April 25, 2025.

PARTING THOUGHTS ON MARKET INDEX LEVELS

VIX sobered from above 20 levels to 15.47 levels this week. Markets would be keen to see if VIX tapers lower to 12 levels, where “Buy on Dips” starts to work.

• Nifty closed the week at 23,852 Spot. Nifty has immediate support at 23,476 and major support at 22,902. Immediate resistance is at 24,050 and later at 24,624. Nifty stays a long play till it decisively breaks below 23,188 with volumes. Shorts only after that.
• Sensex closed the week at 78,553 Spot. Sensex has immediate support at 77,274 and major support at 75,323. Immediate resistance is at 79,225 and later at 81,176. Sensex is a long play, till it breaks below 76,340 with volumes. Shorts have to wait till then.

More than the data flows, the next week will be about the language of the RBI MPC minutes. After a frenetic rally, the markets are likely to remain cautious next week. Focus will remain on the US-EU trade deal and the impact on the price of Brent Crude!