Weekly Recap: Markets Slip Amid Rising Global Tensions

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Weekly Recap

Markets erased the previous week’s gains, slipping over 1% amid rising geopolitical tensions. Here's our take on this week gone by, some stories you might have missed out on, and our thoughts on what to do going ahead, in your weekly stock market report.

Late Slides

  • The Nifty took a late-week dive into the red between Thursday and Friday, ending the week with a 1.14% decline.
  • Broader markets saw mixed performance amid high volatility — both BSE Large- and Mid-Cap indices dropped around 1%, while the Small-Cap index managed to close flat.
  • Market volatility spiked, with the India VIX rising over 3% during the week, reflecting heightened investor anxiety.

Key Triggers

  • The market fall was largely driven by escalating geopolitical tensions in the Middle East. Initial optimism from progress in U.S.–China trade talks faded after Israel launched a strike on Iran’s nuclear facilities.
  • The attack triggered a global risk-off sentiment across the globe, sending investors toward safe-haven assets like Gold and U.S. Treasuries. 
  • Crude oil prices surged following Israel’s airstrikes and Iran’s retaliatory response, prompting investors to partially derisk their portfolios.

The Winners

  • The IT sector emerged as the top performer of the week, with its index gaining 3.1%, driven by strong moves in heavyweights like Tech Mahindra and Wipro.
  • The rally was fuelled by positive momentum from U.S.–China trade discussions in London and reassuring U.S. jobs data, which signalled underlying macroeconomic resilience.

The Losers

  • Eternal plunged 4.7% after competitor Rapido announced plans to pilot a new food delivery model in Bengaluru, sparking investor concerns over increased competition.
  • Adani Ports declined 4.4% following threats by Houthi forces targeting its Haifa port, amid rising tensions stemming from the Iran–Israel conflict.

Meanwhile…

  • The UK economy contracted by 0.3% in April, underperforming expectations after a strong start to the year, as higher taxes and the Trump-led trade war took a toll.
  • Back home, India’s retail inflation eased for the fourth consecutive month, falling to a 75-month low of 2.82% in May—well below the RBI’s 4% target. However, the recent surge in crude oil prices, if sustained, could threaten to reverse this trend amid escalating Middle East tensions.

Market Brief

Key Indices
Sectors
Stocks
Other Key Data

Market Outlook

Market Outlook
Sectors To Watch
Stocks in Radar: Wipro, Infosys, Glenmark Pharma, Max Healthcare, Oberoi Realty

Our Take

  • Geopolitical tensions have cast a shadow over market sentiment, prompting investors to adopt a more cautious stance across the board.
  • With global uncertainty looming, attention now shifts to the upcoming U.S. Federal Reserve meeting, where rates are widely expected to remain unchanged.
  • Given weak global cues, we anticipate a muted market in the near term. Indices are likely to remain rangebound, with the Nifty expected to trade between 24,350 and 25,100 levels.

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