As we approach the midpoint of 2025, the Indian equity market finds itself at the intersection of global political uncertainty, domestic resistance levels, and mixed institutional activity. Despite expectations of calm after years of tariff disputes, recent statements from U.S. President Donald Trump have reignited global fears, triggering sharp movements across markets worldwide.
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Global Headwinds Return: Trump’s Tariff Statements Shake Markets
While the world adapted to pandemic-induced shocks in 2020, the current tremors in 2025 are rooted in geopolitics. President Trump’s recent announcement of a 50% tariff on European goods and a proposed 25% tariff on Apple (if it doesn’t shift manufacturing to the U.S.) sent shockwaves across global markets. These abrupt policy declarations—often walked back later—are causing heightened volatility, particularly in the European and American indices.
US Markets: Reacted similarly with sharp losses, a clear sign of investor anxiety
European Markets: Paris saw a 2.5% decline, and Frankfurt dipped by 1.5%+ in a single session.
Such international tremors inevitably influence Indian markets due to high interconnectivity in trade and capital flows.
Nifty’s Tug-of-War: Breaking Resistance or Slipping Below?
Despite global jitters, India’s Nifty index surprised many by testing the 24,900 level—above expectations based on weak global cues. However, this region between 24,900 to 24,950 remains a strong supply zone. After touching this range, Nifty faced rejection, pulling back to a low of 24,800 before closing marginally higher around 24,850.
Key Takeaways:
- This zone has repeatedly shown resistance, and until broken decisively, upward momentum remains capped.
- PCR (Put Call Ratio) at 1.03 signals a heated zone, suggesting caution.
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Institutional Moves: FIIs and DIIs Show Support
In the face of volatility, both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) stepped up with net buying:
- FIIs: ₹1,800 crore bought
- DIIs: ₹300 crore bought
This coordinated activity helped stabilize sentiment temporarily. However, given that global markets are weak, these inflows may not guarantee a bullish trend.
Bond Yields & Macro Signals from the U.S.
A rise in the U.S. 10- and 20-year bond yields reflects deeper stress in the U.S. economy. As bond yields surge, it signals:
- Decreased confidence in U.S. economic stability
- Higher borrowing costs and increased risk aversion
Such macro trends have implications for global capital flows and may impact FII sentiment in India too.
A Cautious Yet Watchful Week Ahead: Indian market outlook
Nifty
- Support: 24,450 remains a key level. It has held firm during previous tests.
- Resistance: Strong hurdle at 25,150 based on Open Interest data.
- If Nifty breaks below 24,450, we could see deeper corrections.
Bank Nifty
Support zone: 54,500 – any break here could open downside toward 53,000.
Currently trading with a lighter PCR of 0.84, indicating relatively less stress compared to Nifty. Repeated rejection at 55,600 raises caution.
Disclaimer: Readers to note that the views expressed are for educational purpose. Not meant to be any kind of recommendation for trading / investment. We are not a SEBI registered entity.
