Sensex, Nifty End Slightly Higher Amid Global Caution and Tariff Concerns

Mumbai, Wednesday, July 16, 2025: India’s benchmark equity indices, the Sensex and Nifty, concluded Wednesday’s trading session with marginal gains for the second consecutive day. This cautious uptick occurred as investors navigated a landscape of subdued global cues and ongoing uncertainties surrounding international tariff developments.

Key Market Highlights

• Sensex closes at 82,634.48, up 63.57 points (0.08%)
• Nifty settles at 25,212.05, rising 16.25 points (0.06%)
• Day’s range: Sensex moved between 82,342.94 and 82,784.75

Despite these modest advances, the overall market sentiment remained muted. Investors carefully assessed a mix of global trends, a subdued start to the Q1 FY26 earnings season, and persistent concerns over new international tariffs.

Top Gainers and Laggards

Among the Sensex gainers, the standout performers were:

• Mahindra & Mahindra
• Tech Mahindra
• State Bank of India
• Infosys
• Adani Ports
• ITC

On the flip side, major losers included:

• Eternal
• Sun Pharma
• Tata Steel
• Tata Motors
• Bajaj Finance
• Bharat Electronics

Global Market Overview

Asian markets broadly closed in negative territory, with the Kospi, Nikkei 225, Shanghai Composite, and Hang Seng all registering losses. European markets displayed mixed trends during Indian trading hours, while Wall Street had concluded Tuesday’s session largely on a negative note. A key factor influencing global sentiment was an update on US inflation, which suggested that increasing tariffs were contributing to rising prices.

Market Sentiment and Outlook

India’s domestic macroeconomic fundamentals continue to appear favourable, underpinned by several positive factors:

• A continued disinflationary trend, with retail inflation in June 2025 reportedly falling to a low of 2.1%.
• Softening oil prices, with Brent crude declining by 0.26% to USD 68.55 per barrel.
• A healthy monsoon outlook, which bodes well for the agricultural sector and rural demand.
• A lower interest rate environment, with the RBI already having made two consecutive rate cuts, including a significant 50 basis point cut in June. This suggests potential for further cuts if inflation remains subdued, aiding credit growth and consumer spending.

However, market participants are adopting a cautious stance ahead of the Q1 FY26 earnings season. In a high-valuation environment, earnings upgrades are crucial to justify current stock prices, and any disappointment could trigger profit-booking.

Furthermore, global uncertainty continues to influence sentiment:

• The announcement of a new 50% tariff on copper by the US adds to existing trade-related jitters. While direct impact on India’s copper exports is expected to be minimal due to low export volumes to the US and strong domestic demand, such protectionist measures contribute to global trade instability. The primary burden of these tariffs is likely to fall on major copper-exporting countries to the US like Chile, Canada, and Peru.
• Hopes for further US Federal Reserve rate cuts are fading due to persistent inflation pressures, which could lead to a stronger US dollar and potentially impact capital flows into emerging markets like India.

FII Activity and Commodity Check

• Foreign Institutional Investors (FIIs) net bought ₹120.47 crore worth of Indian equities on Tuesday.
• Brent crude declined by 0.26% to USD 68.55 per barrel.

Previous Session Recap

On Tuesday, the Sensex had registered a gain of 317.45 points (0.39%), closing at 82,570.91, while the Nifty increased by 113.50 points (0.45%) to settle at 25,195.80.

Outlook Ahead

Markets may continue to trade in a narrow range as investors weigh global uncertainties, including tariff tensions and inflation risks. While India’s strong macro fundamentals, such as falling retail inflation, softening crude prices, and an accommodative RBI, offer support, caution may prevail ahead of key Q1FY26 corporate earnings. Sector-specific action, particularly in banking, IT, and auto, could guide intraday momentum. Global cues, US bond yield movements, and FII flows will remain crucial in determining short-term direction. A decisive move in Nifty above 25,300 or below 25,100 may indicate trend clarity.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations