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Weekly Review: Indian Stock Markets
The Indian equity markets had a mixed but eventful week, ending with yesterday’s (19 September 2025) session giving a dose of caution after a buoyant run. While global cues and regulatory clarifications offered upside early in the week, profit booking, geopolitical tensions, and fractious domestic headwinds pulled markets lower by week-end.
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Key Drivers During the Week
1. US Federal Reserve & Global Monetary Policy
One of the major themes this week was expectations around the US Federal Reserve’s policy stance. The Fed delivered a 25 basis point rate cut—which was largely expected—and hinted at the possibility of further easing, although with caveats.
This rate cut gave emerging markets like India a boost, especially sectors with exposure to global demand (notably IT), and spurred hopes of more foreign capital inflows owing to softer US yields.
2. Regulatory Clarity & Adani-Hindenburg Fallout
Perhaps the biggest domestic story was the SEBI’s dismissal of many of the Hindenburg Research report’s serious allegations against the Adani Group. SEBI cleared several related-party transaction claims and found no violation of disclosure norms in itemized matters.
The markets reacted favourably. Adani Group stocks jumped, with Adani Total Gas, Adani Power, Adani Enterprises, and others gaining significantly. The group’s market capitalisation surged, reversing some of the downward pressure that had hung over their valuations for more than two years.
3. Forex & Macroeconomic Buffers
Another reassuring signal was India’s external strength: forex reserves crossed the USD 700 billion mark, offering comfort regarding import cover and external vulnerabilities.
The rupee also gained ground on some days amid expectations of Fed rate cuts, and ADIs (domestic institutional investors) stepped in to partially offset outflows by foreign portfolio investors.
4. Geopolitics & External Risks
However, risks were never far away. On Friday, the U.S. revoked a 2018 sanctions waiver for operations at Iran’s Chabahar port. That move stirred concerns around trade and geopolitical stability, which in turn dented investor sentiment.
Global trade policy uncertainty and U.S.-India tariff discussions also loomed in the background.
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Yesterday (19 September): What Happened
Yesterday’s trading session was something of a reality check after a strong run. Here are the key takeaways:
Indices slipped, snapping a three-day rally:
The Sensex ended down ~387.73 points (≈ 0.47%) at 82,626.23, while the Nifty 50 closed ~96.55 points (≈ 0.38%) lower at 25,327.05.
Sectoral underperformance and leaders:
Financials—including marquee names like HDFC Bank, ICICI Bank, Kotak Mahindra—were among the laggards as investors booked profits. Other sectors like consumer durables and private banks also saw weakness. On the other hand, public sector banks (PSUs), utilities, and energy names held up better. Adani group stocks were a notable exception: after SEBI’s clean-up of regulatory overhang, many Adani companies rallied sharply.
Technicals & supports:
Key support levels to watch moved into focus. The Nifty needs to hold ~25,350 and below that ~25,200 to prevent further downside. Resistance lies in the 25,500-25,700 zone if markets attempt a bounce. Analysts such as Chandan Taparia flagged these levels.
Foreign flows & sentiment:
Foreign portfolio investors (FPIs) remained tentative. While the Fed’s rate cut created optimism, trade-related concerns and geopolitical ambiguity weighed on sentiment. Domestically, investors were also cautious given stretched valuations in certain sectors.
Individual stocks & moves:
Adani group: Big winners. Stocks saw sharp gains, with some jumping up to ~13%. Market cap across the group surged.
Hindustan Unilever (HUL): Underperformed in a broadly weak consumer discretionary environment.
Tata Steel: Slight decline, underperforming some peers in metals.
NTPC: Managed to outperform the broader market slightly.
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What This Means Going Forward
From this week’s action and yesterday’s pullback, several conclusions and watch-points emerge:
1. Profit Booking Heading into Uncertainty
After a streak of gains, markets often pause to digest. Yesterday’s fall likely reflects profit booking, especially in sectors that had run up aggressively (banks, financials, some private sector names).
2. The Role of Regulatory Clarity in Reducing Risk Premiums
The SEBI verdict on the Adani-Hindenburg case is a big positive. Removing regulatory risk is always welcomed by investors; this development seems to have lifted not just Adani stocks but investor sentiment broadly. However, there remains residual scepticism, and any misstep or contrary news could re-ignite risk aversion.
3. Global Conditions Still Matter
Fed rate cuts, US trade policy, and global inflation are major levers. India is not insulated. If global conditions worsen or if interest rate cuts look less certain, the positive momentum could falter. The recent Chabahar sanction news shows how geopolitics can re-enter and blunt sentiment.
4. Valuations & Earnings in Focus
One criticism levelled at the Indian market has been that earnings growth has lagged expectations, while valuations (especially in certain growth sectors) have stretched. Analysts are likely to place greater emphasis on earnings Q2 & Q3, and ensure that companies can deliver.
5. Importance of Domestic Flows
Foreign flows remain volatile. Domestic institutional investors (DIIs) will have to continue playing a stabilizing role. Currency dynamics (rupee strength/weakness) and foreign reserve buffers remain important tailwinds if managed well.
6. Technical Levels Will Guide Short-Term Moves
As noted, supports around 25,350 for Nifty (and perhaps 25,200 if weakness intensifies) are critical. Resistance lies in the 25,500-25,700 range. A break above resistance could lead to more upside; a break below support could invite further weakness and possibly test lower bands.
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Conclusion
In sum, this week for Indian equities has been one of contrasts: regulatory relief and global dovishness added fuel, while geopolitical shocks and valuation concerns pulled back sentiment. Yesterday’s session reflected that delicate balance—markets couldn’t continue climbing unchallenged.
For investors and watchers, the coming days will likely depend on:
Further clarity from global central banks, especially the Fed (what their forward guidance looks like)
Domestic corporate earnings and government/regulatory policy announcements
Geopolitical developments around trade, tariffs, and external policy factors
If you’re positioning now, a cautious, selective approach may serve better than broad bullish bets. Keep stops in place, watch the technical levels, and focus on companies with strong earnings visibility and regulatory stability—especially in sectors like PSU banks, utilities, energy, where risk seems lower (for now).
