Week Ending 29th August 2025

Dear patrons, the US tariffs on India became applicable in the week gone by. One of the highest tariff rates has been levied on India. Although we are very confident that India will emerge out of this "harakiri" by the US administration, stronger, however, near-term jitters may be felt, particularly in the stock markets.

Indian markets were firmly in bear grip over the truncated week, benchmark Nifty lost close to 2% and closed around 24400. BankNifty was weaker and lost close to 3% and closed well below 54000. In our view there are more than one reasons for this fall. Tariffs have played their part in this fall, the bigger worry for the markets is the USD-INR relation. The INR has been losing ground consistently over last few days and has reached historic low levels. As long as INR remains weak, chances of rally in the markets remain grim.

Indian GDP numbers were announced on August 29th and to the surprise of most analysts and some dolts sitting outside the country, it grew by a whopping 7.8% for Q1 FY2026. The GDP growth is at a multi-year high. India remains world's fastest growing big economy. We believe, Indian economy will outdo other major economies in terms of growth driven by very strong domestic consumption. On the flip side this robust growth and low inflation may prompt the RBI to hold interest rate status quo in coming MPC meet.

Globally, markets remained quite buoyant. The US indices have again managed to reach new life-time highs, while Asian markets remained rangebound. A lot of topsy turvy moves look to be in store as geopolitical situations evolve and American hegemony is challenged.  We believe, it is just a passing phase, and things should normalize in coming days.

Let's take a look at charts and try to figure out what lies in store for the coming week.

As we can see Nifty fell on 3 out of four trading sessions. Nifty broke its important support around 24600. The signs are not good on Nifty, and we may see further slide in coming days towards 24000. If a good set of GDP numbers add some enthusiasm, it may rally towards 24800, which should act as resistance. Beyond 24800 it may move towards 25200-25300 in a jiffy. A break below 24000 may lead to more pain and Nifty may slide towards 23200-23300 range.

BankNifty remained weaker of the two and lost more ground. Immediate support for BankNifty lies around 53500-53600. Move below 53500 may trigger another 1000 point cut on BankNifty. On the upside, resistance is placed around 54900-55000. Beyond 55000 we should witness a strong rally in BankNifty.

Nifty Midcap 100 index also bled profusely over the last week losing more than 3%. It should find support around 55100-55000 while resistance is placed around 56800-56900. It needs to move above 57200 for any worthwhile rally.

Now that derivatives contract expiry and tariffs are out of the way, markets should find some stability. Traders need to be nimble footed and adhere to strict stop losses. Investors may look to buy good quality stock in each dip.

Long term story for India remains intact.

Stay Invested!!!!

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.