Nifty closed with weekly declines of 0.7%, trading in a close range last week but this week has started on a positive note. What is the chart suggesting about the course of its move and levels that will be important to watch out for?
Despite U.S. tariff hikes and a downturn in global markets, Nifty demonstrated remarkable stability, declining only 0.7% this week. The index traded within a tight range of 22,316 to 22,676, maintaining levels close to its pre-election positioning.
With support around 21,900 – 22,000 and resistance at 22,800 – 23,000, analysts suggest that Nifty’s resilience reflects investor confidence amid macroeconomic uncertainties. As global volatility persists, market participants will closely watch key levels for potential breakouts or corrections in the coming weeks.
The IT sector was the weakest link this week and it fell over 5%. Whatever positive sentiments that were revived post Q3 earnings have been battered because of fears of US recession. People who have invested in this theme in the last one year have only burned their hands. Is it time to cut losses and exit?
The IT sector witnessed a sharp decline, shedding over 2,000 points in just one week, as fears of a U.S. recession rattled investor confidence. L&T Technology Services led the losses, dropping 9.20%, followed by Wipro (-7.30%) and Infosys (-6.30%).
Global economic uncertainty has resulted in cautious corporate spending, impacting growth prospects for tech firms. Analysts warn that IT stocks may remain volatile until macroeconomic conditions stabilize. While risk-averse investors consider reducing exposure, long-term players may await clarity on U.S. economic trends before making strategic decisions.
Trump has been a bad influence so far not just on the Indian markets but also for Wall Street and Nasdaq is down nearly 9%. But European markets like DAX and CAC have done well this year while Hang Seng is trading like there is no tomorrow. Can you explain this and is there a lesson for Indian investors from this.
Despite global uncertainty, Europe’s markets have surged, with Germany’s DAX up 16% and Spain’s IBEX gaining 11%. This resilience is driven by attractive valuations (P/E ratio of 16.9 vs. US’s 24.9), economic recovery, and ECB rate cuts. The defense sector has also thrived amid geopolitical tensions.
China is aggressively targeting 5% GDP growth with massive infrastructure spending, AI investments ($20B fund), and consumer stimulus ($41B trade-in program). The tech and defense sectors are booming, led by semiconductor growth in Taiwan and Japan’s military expansion.
Indian investors should consider global diversification. Additionally, closely monitoring policy moves—such as China’s aggressive stimulus—can provide insights into potential shifts in commodity demand and global trade. With markets evolving rapidly, a balanced approach that integrates diversification, policy awareness, and sectoral strengths will be crucial for navigating India’s financial landscape in 2025.
There is an overwhelming view that the allocation should tilt towards largecaps now instead of SMIDS. Do you concur with the view and if yes which stocks/themes are ripe for that leap?
Given the recent market downturn, where Nifty 50 fell 0.7% in a week and 2.8% in a month, while Nifty Midcap 150 and Nifty Smallcap 250 declined significantly more (down 2.4% and 2.8% in a week, and 4.8% and 6% in a month, respectively), a shift toward large-cap stocks appears prudent. Large caps tend to provide stability during uncertain times, given their strong fundamentals and lower volatility compared to mid and small caps.
However, rather than completely avoiding mid and small caps, investors should focus on diversification based on risk appetite and time horizon. While large caps may provide stability, selective opportunities in midcap themes like infrastructure, manufacturing, and defense could still offer long-term growth potential. A well-balanced portfolio that spreads risk across different market caps and sectors can help investors navigate volatility while capitalizing on emerging opportunities. Ultimately, investment decisions should align with individual financial goals and market conditions, ensuring a mix that balances risk and reward effectively.
There were some big winners this week like Data Patterns, Tube Investments and KSB while SPARC, Sterling Wilson and IndusInd Bank were among the worst losers. What should investors do with them?
We can answer this by checking factor scores for these stocks using our Share.Market-powered research, which evaluates them across five key factors: Momentum, Value, Sentiment, Volatility, and Quality.
Each stock is scored out of 5 on these factors, helping investors assess price trends, fair valuation, market perception, risk levels, and financial strength. By using these insights, investors can make informed decisions and identify strong opportunities in the current market.
- Data Patterns:
Momentum: 1/5
The stock has weak momentum, indicating an underperforming trend. Value: 2/5 | Somewhat expensive, suggesting it might be overvalued.
Quality: 5/5
Excellent quality, reflecting strong financial health and operational performance.
Volatility: 3/5
Moderate price fluctuations, indicating a balanced risk level.
- Tube Investments:
Momentum: 1/5
The stock has weak momentum, indicating an underperforming trend.
Value: 1/5
Very expensive, suggesting it is highly overvalued.
Quality: 5/5
Excellent quality, reflecting strong financial health and operational performance.
Volatility: 5/5
Low volatility, indicating stable price movements with minimal fluctuations.
Sentiment: 1/5
Very bearish sentiment, suggesting negative investor and analyst outlook.
- KSB:
Momentum: 1/5
The stock has weak momentum, indicating an underperforming trend.
Value: 2/5
Somewhat expensive, suggesting it is slightly overvalued.
Quality: 5/5
Excellent quality, reflecting strong financial health and operational performance.
Volatility: 5/5
Low volatility, indicating stable price movements with minimal fluctuations.
- SPARC:
Momentum: 1/5
The stock is a huge underperformer, showing weak momentum.
Quality: 2/5
Below-average quality, indicating weaker financial or operational performance.
Volatility: 4/5
Low price fluctuation, meaning the stock has relatively stable movements.
- Sterling Wilson:
Momentum: 1/5
The stock is a huge underperformer, indicating weak price momentum.
Value: 1/5
Considered very expensive, meaning its valuation is high compared to its earnings or fundamentals.
Quality: 4/5
The company has good quality in terms of financials or operational strength.
Volatility: 4/5
Low price fluctuation, making it relatively stable.
- IndusInd Bank:
Momentum: 2/5
The stock is an underperformer, but not as weak as some others.
Value: 5/5
Considered highly undervalued, meaning it may be a good buy based on valuation metrics.
Quality: 2/5
Below average quality, indicating financial or operational weaknesses.
Volatility: 4/5
Low price fluctuation, making it relatively stable.
Sentiment: 1/5
Analysts are very bearish on this stock.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
