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Markets in a wait & watch mode over tariff, focus will shift to Q1FY26 earnings

ICICIdirect Research 11 Jul 2025 DISCLAIMER

Equity benchmarks extended breather over second consecutive week amid lack of clarity on India - US bilateral trade deal. Consequently, settled the week at 25150, down 1% wherein broader market relatively underperformed by losing 1.5% each.  Sectorally, IT, Defence extended losses while FMCG and MNC stocks relatively outperformed 

What to expect: Volatility to remain elevated amid progression of earning season coupled with Tariff related development wherein strong support is placed at 24800 levels. Currently, index is undergoing healthy consolidation wherein over past 10 sessions Nifty has merely retraced 50% of the preceding 10 sessions up move.

Slower pace of retracement while trading around 20 days EMA, highlights robust price structure. Hence, any dip from hereon should be capitalised to accumulate quality stocks with strong earnings as we expect Nifty to eventually resolve higher and head towards 25800 in coming weeks  

Key Monitorable:

All eyes will be on outcome of US-India bilateral trade deal. The better-than-expected outcome would fuel momentum to challenge all-time high in coming month wherein strong support is placed at 24900.
Falling US Dollar index would act as boon for equities that would eventually result into FII's inflows.
India VIX has extended losses and likely to close at one year low of 12, indicating participants anxiety at lowest level.
Structure: The formation of higher peak and trough is backed by strong market breadth as currently 60% stocks of Nifty 500 universe are trading are trading above 200 days SMA compared to last month's reading of 52% that bodes well for durability of ongoing up move/

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