Dalal Street Dips as Large Caps Drag, But Small Caps Shine Amid Global Optimism

Indian Developments

The benchmark Nifty 50 closed the week lower at 24,968, registering a decline of approximately 0.72% primarily driven by weak quarterly earnings of Financial and IT sectors , uncertainty surrounding a potential US-India trade deal and mixed signals from US fed reserve on interest rate cuts.

In July, Foreign Institutional Investors (FIIs) remained the persistent net sellers offloading over ?3,694 crore worth of equities amid global uncertainties and elevated valuations.

The rupee weakened for the fifth consecutive month, influenced by foreign outflows and global currency trends. Brent crude hovered around $70.03 per barrel, following geopolitical tensions and supply concerns

Small-cap and mid-cap indices bucked the trend, gaining 1.5% and 1.03% respectively.

Global cues remained supportive, with strong US retail data. India’s GDP growth slowed from 8.6% in Q3 2024 to 6.2% in Q3 2025, reflecting a broader economic moderation. The recent correction in Indian equities is seen as a response to elevated valuations and macroeconomic headwinds.

The Nifty 50 ended the week lower at 24,968, marking approximately 0.72% decline .

Sectoral Developments

During the week ending July 18, 2025, Nifty Media outperformed all other sectoral indices, closing with a robust gain of 3.92%. The rally was fueled by strong stock-specific performances and revised stock evaluation. Nifty Realty and Nifty PSU Bank posted modest gains of 1.95% and 1.75%, respectively, supported by improving fundamentals.

On the downside, Nifty IT, Nifty private Bank and Nifty India Defence weighed down by 1.46%, 1.93% and 4.10% respectively, driven by subdued quarterly earnings , weak results from leading banks and valuation concerns.

Global Developments

Major U.S. stock indices—including the S&P 500, Dow Jones Industrial Average,—experienced notable gains of 0.54%,0.52% respectively driven by strong US retail data.

In Europe, the FTSE 100 marginally gained by 0.09%and Germany’s DAX declined by 0.12% amid the sluggish retail sales, mixed signals from the Eurozone economy.

Asian indices posted modest gains, following the global rally. South Korea’s KOSPI declined by 0.13% , Hong Kong’s Hang Seng and Shanghai Composite up surged by 1.51% and 0.50% respectively. China’s inflation data showed persistent deflation

Other Markets:

• Brent Crude oil prices ended at $70.03 per barrel.
• The rupee was depreciated to 86.16 levels against the US dollar.
• The 10 Year Benchmark G-Sec yield closed at 6.31% this week.
• Gold prices closed at Rs 97,800 per 10 grams.

Source: www.nseindices.com; google finance, MCX Gold Prices; www.rbi.org.in; Morningstar and tradingeconomics.com, ccilindia.com, Economic times

Data for week ended on July 18th , 2025.

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