Weekly Market Recap: Tariffs, FII Selling & Stock Performance

Markets snapped their two-week gaining streak due to concerns over tariffs and FII selling. 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.

Falling Knife

• The benchmark indices took a significant hit last week, closing in the red with a decline of 1.8% from the previous Friday’s levels.
• Broader market indices were hit even harder, with the BSE Large-cap Index dropping 2%, the BSE Mid-cap Index falling nearly 3% and the BSE Small-cap Index shedding 3%.
• The India VIX fear gauge also rose slightly from last week, reflecting investor concerns as geopolitical developments were digested.

The Big Stories

• The news at home was the Trump administration’s decision to impose a 50% tariff on Indian products, which came into effect on Wednesday.
• FII and FPI outflows surged in response to this significant shock, as global investors grew cautious about the Indian economy’s ability to withstand the pressure.
• The Indian rupee ended its two-week winning streak, hitting a fresh record low of 88.31 against the US dollar.

The Winners

• Maruti Suzuki continued its strong performance on D-Street last week, rising 3.1% following the release of its new e-VITARA battery electric vehicle.
• Eicher Motors followed closely, gaining 3% on expectations of strong volume growth driven by robust rural demand, anticipated GST reforms and a favorable monsoon season.

The Losers

• M&M fell 6% last week, driven by a combination of profit-booking and competitive re-evaluations.
• Shriram Finance also dropped 5.8% as broader market weakness and investor sentiment negatively impacted its stock price.

Meanwhile…

• GDP growth in India unexpectedly came in strong at 7.8% for Q1 FY2025-26, beating estimates by a wide margin despite the looming risks of tariffs. Read more
• Manufacturing activity also reached a two-year high in FY24, with the number of factories added soaring to a 13-year high.

Market Brief

Market Outlook

Our Take

• Given the fallout from the tariff issue and the resulting uncertainty among foreign investors, sentiment is expected to remain subdued in the near term.
• Unless there is a positive breakthrough from PM Modi’s meeting with Chinese President Xi, we anticipate the Nifty to stay range-bound with a negative bias next week, likely trading between 24,150 and 24,700.

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