US markets near new highs while Indian markets face FII selling pressure

The US stock market demonstrated mixed but generally resilient performance last week amid escalating tariff concerns, the start of earnings season, and key economic data releases. President Trump’s push for higher tariffs on the European Union and other countries created significant trade uncertainty.

However, markets found some relief in the extended negotiation period, which runs through August 1 before further tariff actions are implemented. The S&P 500 and Nasdaq reached new all-time highs, gaining approximately 0.5% and 1.4%, respectively, for the week. The Dow Jones Industrial Average closed essentially flat. Technology stocks drove much of the Nasdaq’s outperformance, while broader market strength reflected solid corporate earnings and robust economic fundamentals.

The Indian stock market endured a turbulent last week, characterized by sustained selling pressure from Foreign Institutional Investors (FIIs) and cautious sentiment driven by global uncertainties and the commencement of the corporate earnings season. At the opening today, Indian markets will react to the plethora of earnings announcements made over the weekend. Larger private banks, which were scheduled to announce their results, have performed at or better than market expectations on the margin front. In comparison, smaller private sector banks have witnessed margin contraction and weak asset performance.

Reliance Industries, the largest among all companies, has also announced subdued numbers. RIL’s results are below analysts’ estimates, due to lower-than-expected O2C margin and lower than-expected crude oil throughput. Trade policy uncertainty continues to weigh on market sentiment as investors await clarity on the U.S. administration’s tariff strategy beyond the August 1 deadline. Geopolitical concerns added another layer of uncertainty, with potential disruptions to cheap Russian oil supplies due to threatened U.S. and NATO sanctions over the Ukraine conflict keeping investors on edge.

On Friday, the Nifty closed below its 50-day SMA for the first time since April 12. It also violated the previous swing low support of 25001 and closed below that level. The short-term trend of the Nifty has turned cautious, with further support seen at 24742 and 24500. On the higher side, 25255 would continue to act as a resistance. Indian markets are poised to open mildly subdued in reaction to quarterly results over the weekend.

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Source: HDFC Securities Prime Research