Markets Commentary 17 July 2025: Investor Sentiment Cautious

Mumbai, July 17, 2025: Equity benchmarks Sensex and Nifty erased early gains to close lower on Thursday, as investor sentiment turned cautious due to ongoing concerns over the US tariff situation. The Nifty 50 opened on a strong note but failed to hold higher levels and slipped during the session, closing at 25,111, down 100 points or 0.4%, on the weekly expiry day.

On the sectoral front, performance was mixed IT and PSU bank stocks were among the top losers, falling between 0.8% and 1.4%. In contrast, FMCG, metal, consumer durables, and realty indices gained between 0.5% and 1%. In the broader markets, both the Nifty Midcap and Small cap indices edged lower, declining by 0.17% and 0.12%, respectively.

Nifty Outlook

Nifty kicked off the session at 25,230, briefly touching a high of 25,238 before volatility took hold, dragging the index down to an intraday low of 25,135. The day’s trading reflected a rapid shift in sentiment, with initial optimism giving way to turbulence. Sectorally, pockets of strength emerged in Realty, Metals, Consumer Durables, and Pharma, as these segments managed to outperform amid broader market noise. In contrast, IT, Banking, and Financial Services remained under pressure, weighed down by lingering uncertainties.

The Nifty index formed a bear candlestick pattern with a lower high and lower low signalling profit booking from the 20 days EMA. As noted earlier, the index has seen a shallow retracement, correcting only 50% of its previous upswing. This mild pullback, along with extended time correction, indicates a constructive structure and formation of a higher base near the key support of 25,000. Index in the last three sessions is facing resistance at the 20 days EMA placed around 25250 levels only a move above that will open further upside toward 25,350 and 25,600 in the coming weeks. However, failure to clear the 25,250 resistances convincingly could lead to further consolidation in the 25,000–25,250 range. Key support, as mentioned earlier, is placed in the 24,900–25,100 zone.

Bank Nifty Outlook

Bank Nifty formed a sizable bear candle signaling profit booking at higher levels. The index on expected lines in the last 10 sessions is seen consolidating in the range 56,500-57,600. We expect the index to extend the same, and only a move beyond this range will signal the next directional move in the index. Key short-term term support is placed at 56,000–55,500 region, representing a confluence of the 50-day EMA and the key retracement level. The broader trend remains positive, and the current consolidation should be viewed as buying opportunities.

Investor Confidence

On the global stage, investor confidence stayed tentative, shaped by speculation around a possible change in Federal Reserve leadership—a rumor denied by President Trump but nonetheless casting a shadow over sentiment. Additional caution stemmed from the ongoing US-India trade negotiations, further prompting a defensive stance among market participants.

On the derivatives front, the advance-decline ratio stayed positive, and significant open interest buildups were noted in RBL Bank, Balkrishna Industries, HDFC AMC, Tech Mahindra, and Sona Comstar, signaling selective activity amid the choppy market conditions.