New Delhi: The Indian stock market ended the week on a weak note by July 4, with both the Nifty 50 and Sensex falling 0.7 percent. This drop snapped their two-week winning streak, as investors decided to book profits and stay cautious. The main reasons were ongoing uncertainty about the India-US trade deal, worries before the start of the earnings season, and foreign investors pulling money out of Indian stocks.
Profit booking was the main reason for the fall, as investors waited for important global trade news. Concerns about possible US trade actions made people nervous about when a trade deal with the US and other countries would actually happen. Still, the losses were limited after reports suggested India and the US might reach a temporary deal soon.
Interestingly, mid-cap and small-cap stocks held up well. The Nifty Midcap 100 rose 0.5 percent and the Nifty Smallcap 100 gained 0.3 percent for the week, showing that investors still had confidence in these segments.
Looking ahead, five big factors could move the market next week:
India-US Trade Deal:
There’s still no clear date for a trade deal. With the US President’s July 9 deadline coming up, investors are anxious. India has also threatened retaliatory duties if talks fail, but says it won’t rush into any agreement.
Q1 Earnings Season:
The first quarter results for FY26 will start coming in, with major IT companies like TCS and Tata Elxsi reporting soon. Investors will watch closely for management commentary and growth outlook.
Monsoon Progress:
India received above-normal rainfall in June, helping crop sowing. A healthy monsoon is good for the economy, so investors will keep an eye on weather updates.
Foreign Capital Flows:
Foreign investors have sold Rs 5,773 crore worth of Indian shares this month due to trade worries and high valuations. If they keep selling, markets could remain under pressure.
Rupee Movement:
The value of the rupee against the US dollar is another important factor. Any sharp movement in the rupee can impact import and export companies, and also affect foreign investment. A weaker rupee can make imports costlier and may add to inflation worries.
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