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Global macros in focus amid monthly expiry week

ICICIdirect Research 25 Jul 2025 DISCLAIMER

Equity benchmarks pared intra-week gains that resulted into extended losses over fourth week in a row amid absence of US-India bilateral tariff agreement. Nifty underperformed the global peers and settled the week at 24900. Broader market seen profit booking as Nifty midcap and small cap lost 1% and 2%, respectively. IT, Realty, FMCG weighed on market sentiment while Financials, Metal relatively outperformed


Key highlight: India VIX has corrected over sixth consecutive week and now approached at cyclical lows of 10, indicating participants anxiety at lowest level amid absence of key trigger. However, in the coming weeks, we expect rise in volatility tracking U.S. Fed policy coupled with monthly expiry and domestic IIP print.
What to expect: The prolonged indecision around US- India bilateral trade and lack of spark on the earning front resulting into extended consolidation. Hence, for a meaningful pullback to materailise, index need to decisively close above 25300, else continuation of consolidation in 25300-24500 zone amid stock specific action can be expected as we sail through the earning season. Strong support is placed at 24500 which has been held on multiple occasions despite geopolitical worries seen during May and June. 
Broader market: The breach of past three weeks low on Midcap and small cap indices indicates corrective bias in the broader market wherein possibility of mean revsrion towards its short term averages cannot be ruled out
Structurally, since April intermediate corrections have been arrested around its 50 days EMA. In addition to that, slower pace of retracement, highlights robust price structure. Hence, focus should be on accumulating quality stocks on dip backed by strong earnings 


Key Monitorable:
US Fed Policy Outcome
Development on US-India bilateral trade deal.
Weakness in US Dollar index and Crude oil prices 
India VIX is bouncing from extreme oversold territory
 

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