The Indian stock markets carried forward the momentum from the previous week (Aug 11–15), where indices snapped a six-week losing streak.
During the week of August 18–22, 2025, benchmarks extended gains and managed to consolidate near lifetime highs. Robust domestic triggers—including a major GST rationalization proposal and dovish global signals from the U.S. Fed combined to fuel optimism across sectors.
During the week of August 18–22, 2025, benchmarks extended gains and managed to consolidate near lifetime highs. Robust domestic triggers—including a major GST rationalization proposal and dovish global signals from the U.S. Fed combined to fuel optimism across sectors.
Though some midweek caution and stock-specific volatility emerged, the broader undertone remained firmly positive. Auto, FMCG, IT, Realty, and Metals led the charge, while Midcaps and Smallcaps continued to outperform largecaps.
This week confirmed one crucial fact: the Indian market is not only resilient but also positioned to benefit from both domestic reforms and global liquidity shifts.
Macro Context: The Winds of Change
Global Perspective
# Jackson Hole Symposium (Aug 23–24): Fed Chair Jerome Powell struck a balanced but dovish note, hinting at possible rate cuts in September 2025. This reinforced hopes of improved global liquidity. Risk assets across Asia and Europe reacted positively in anticipation, giving Indian investors more confidence heading into the following week.
#Geopolitical Relief: The Trump–Putin Alaska Summit reduced near-term fears of Russian oil disruptions. While tariffs remain a contentious issue, the possibility of softer U.S. stances toward Indian exports injected relief into trade-linked stocks.
#Global Market Cues:
1. U.S. indices surged mid-week, with the Dow Jones and S&P 500 scaling new highs post-CPI numbers.
2. Asian peers like Nikkei and Hang Seng advanced, offering strong external support to Dalal Street.
1. U.S. indices surged mid-week, with the Dow Jones and S&P 500 scaling new highs post-CPI numbers.
2. Asian peers like Nikkei and Hang Seng advanced, offering strong external support to Dalal Street.
Domestic Landscape
# GST Rationalisation: PM Modi’s Independence Day announcement of a simplified GST structure (merging 12% and 28% slabs into 5% and 18%) was the defining domestic trigger of the week. Markets interpreted this as a long-term positive for consumption and corporate margins, especially in autos, FMCG, and discretionary sectors.
# Rupee Strength: The rupee firmed up to ₹87.35/USD, gaining ~0.23% through the week, supported by equity inflows and reduced oil import pressure. This lent stability to currency-sensitive sectors like IT and Pharma.
#Retail Liquidity: SIP inflows, averaging ₹18,000 crore monthly, kept mid and small caps buoyant, even as FIIs showed signs of caution mid-week.
Day-Wise Market Action
Monday, August 18 — Bulls Take Charge
# Indices:
*Sensex: +676 points → 81,273.75
* Nifty 50: +250+ points → 24,850+
*Sensex: +676 points → 81,273.75
* Nifty 50: +250+ points → 24,850+
#Sectoral Moves:
1.Auto (+4%): Tata Motors, M&M, and Maruti soared on GST cut hopes and strong July sales.
2.Consumer Durables (+3%): Titan and Voltas rallied on improved consumption outlook.
3.Realty (+2%): DLF and Godrej Properties rose on expectations of continued housing demand
4.Metals & FMCG: Up ~1–2%, led by Hindalco and ITC.
5.Private Banks: HDFC Bank and Kotak Mahindra gained steadily
1.Auto (+4%): Tata Motors, M&M, and Maruti soared on GST cut hopes and strong July sales.
2.Consumer Durables (+3%): Titan and Voltas rallied on improved consumption outlook.
3.Realty (+2%): DLF and Godrej Properties rose on expectations of continued housing demand
4.Metals & FMCG: Up ~1–2%, led by Hindalco and ITC.
5.Private Banks: HDFC Bank and Kotak Mahindra gained steadily
#Broader Market:Midcap Index: +1% and Smallcap Index: +1.4%
Key Drivers:
Optimism around GST reforms.
Geopolitical relief post Trump–Putin meet.
FIIs turned net buyers, supported by strong DII participation.
Optimism around GST reforms.
Geopolitical relief post Trump–Putin meet.
FIIs turned net buyers, supported by strong DII participation.
Tuesday, August 19 — Consolidation with a Positive Bias
Markets extended gains, though at a slower pace as traders awaited clarity on the U.S. Fed.
1.IT Sector: Infosys, TCS, and HCL Tech gained 1–2%, supported by a weak rupee.
2.FMCG: HUL and Nestle advanced, riding safe-haven buying
3.Metals: JSW Steel and Hindalco continued strength on global demand cues.
4.Broader Markets: Mid and small caps outperformed largecaps, with stocks like Zomato and IRCTC seeing fresh buying.
1.IT Sector: Infosys, TCS, and HCL Tech gained 1–2%, supported by a weak rupee.
2.FMCG: HUL and Nestle advanced, riding safe-haven buying
3.Metals: JSW Steel and Hindalco continued strength on global demand cues.
4.Broader Markets: Mid and small caps outperformed largecaps, with stocks like Zomato and IRCTC seeing fresh buying.
Wednesday, August 20 — Vedanta Steals the Headlines
#Indices: Benchmarks largely stable, consolidating around highs.
Stock Focus:
1.Vedanta (-3%): Shares slipped after reports of regulatory delays in its mega demerger plan. SEBI and government concerns meant hearings would now stretch into mid-September.
2. Banks: Mixed trade as PSU banks saw mild profit booking.
3. Healthcare: Sun Pharma and Dr. Reddy’s gained on regulatory approvals.
1.Vedanta (-3%): Shares slipped after reports of regulatory delays in its mega demerger plan. SEBI and government concerns meant hearings would now stretch into mid-September.
2. Banks: Mixed trade as PSU banks saw mild profit booking.
3. Healthcare: Sun Pharma and Dr. Reddy’s gained on regulatory approvals.
Investor Mood: Despite Vedanta’s drag, broader sentiment stayed resilient with GST optimism intact.
Thursday, August 21 — Earnings and Dividend Buzz
Vedanta: Board approved a second interim dividend for FY26, with record date fixed at Aug 27. This cushioned some of the prior day’s losses.
IT Stocks: LTIMindtree and Infosys gained on strong European client traction.
FMCG & Consumption: ITC, Dabur, and Britannia traded higher, reflecting optimism around rural demand recovery.
Indices: Markets traded in a tight range but maintained upward bias.
IT Stocks: LTIMindtree and Infosys gained on strong European client traction.
FMCG & Consumption: ITC, Dabur, and Britannia traded higher, reflecting optimism around rural demand recovery.
Indices: Markets traded in a tight range but maintained upward bias.
Friday, August 22 — Calm Close
Indices: Ended slightly lower as traders booked profits before the weekend.
Flows: FIIs sold around ₹1,926 crore, while DIIs stepped in with net buying of ₹3,895 crore.
Defensive Stocks: Healthcare and IT provided cushion, while autos saw mild profit booking after a strong run earlier in the week.
Flows: FIIs sold around ₹1,926 crore, while DIIs stepped in with net buying of ₹3,895 crore.
Defensive Stocks: Healthcare and IT provided cushion, while autos saw mild profit booking after a strong run earlier in the week.
Sectoral Review: Leaders and Laggards
Auto — The Star Performer
Auto stocks were the week’s highlight. From Maruti to Tata Motors, optimism over GST rationalisation, EV adoption momentum, and festive-season demand powered gains. Tractor sales and two-wheeler exports added to the cheer.
FMCG — Consumption Revival in Sight
HUL, ITC, Nestle, and Britannia gained steadily. Investors expect GST cuts to boost rural demand, while easing inflation pressures improve margins.
IT — Currency Cushion
With the rupee at ₹87.35/USD, IT majors like Infosys, TCS, and Wipro enjoyed export-led tailwinds. Additionally, strong deal wins in Europe and North America lifted sentiment.
Metals — Global Demand Spark
Hindalco, Tata Steel, and JSW Steel surged on news of rising aluminum and steel demand globally. Commodity strength supported domestic pricing power.
Realty — Housing Boom Continues
Real estate leaders DLF and Godrej Properties rose, backed by strong booking data and GST-linked optimism for property-linked consumption.
Healthcare — Defensive Gains
Sun Pharma, Dr. Reddy’s, and Cipla rallied on regulatory approvals and growing demand in U.S. generics. Hospitals like Apollo also saw strong patient flow.
Market Flows: FIIs vs DIIs
FIIs: Turned net sellers mid-week, pulling out ~₹1,926 crore on Thursday, but remained broadly engaged with select buying in IT and auto
DIIs: Consistently supported the market with nearly ₹3,895 crore of net buying, powered by mutual fund SIP inflows.
Retail Investors: Continued their dominance, with SIP flows averaging ₹18,000 crore monthly, keeping small and midcaps buoyant.
Technical & Chart Outlook
Nifty: Held strong above 24,850, with resistance around 25,000–25,100.
Sensex: Sustained near 81,000, consolidating gains after a massive rebound.
Broader Indices: Midcap and Smallcap indices continue to outperform, though valuations are stretched. Analysts caution a selective approach.
Historical Lens: Independence Day Announcements & Markets
2017 GST Rollout: Markets were volatile but later surged as GST streamlined taxation.
2025 GST Rationalisation: Investors expect a repeat of 2017, with reforms spurring consumption, boosting corporate earnings, and adding to India’s long-term growth story.
Global Market Comparisons
US Markets: Dow Jones and S&P 500 scaled record highs after July CPI showed cooling inflation.
Asia: Nikkei and Hang Seng rose, reflecting global risk-on mood.
Europe: FTSE and DAX saw steady gains, supported by ECB’s dovish stance
Risks to Watch
1.Trade Tensions: U.S.–India tariffs remain a key overhang, especially for IT and textile exporters.
2.Midcap Valuations: Elevated P/E levels could lead to corrections.
3. Global Oil Prices: Any flare-up in Russia–Ukraine tensions could push crude higher, impacting India’s import bill.
4.Fed Policy Surprises: Despite dovish hints, any hawkish Fed turn could reverse liquidity-driven flows
2.Midcap Valuations: Elevated P/E levels could lead to corrections.
3. Global Oil Prices: Any flare-up in Russia–Ukraine tensions could push crude higher, impacting India’s import bill.
4.Fed Policy Surprises: Despite dovish hints, any hawkish Fed turn could reverse liquidity-driven flows
Investor Playbook
1. Short-Term Traders: Focus on momentum sectors like Auto, FMCG, and IT, but trail stop-losses near support zones.
2. Medium-Term Investors: Accumulate selectively in consumption, healthcare, and banking on GST-led and earnings tailwinds.
3. Long-Term Investors: Stay invested in structural themes—Digital, EVs, and Infrastructure—aligned with India’s policy thrust.
2. Medium-Term Investors: Accumulate selectively in consumption, healthcare, and banking on GST-led and earnings tailwinds.
3. Long-Term Investors: Stay invested in structural themes—Digital, EVs, and Infrastructure—aligned with India’s policy thrust.
Conclusion
The week of August 18–23, 2025, reinforced India’s position as one of the most resilient global markets. With GST reforms igniting hope, global dovish cues supporting liquidity, and broad-based sectoral participation, Indian equities appear on solid ground.
Yet, prudence is warranted. Tariffs, global oil dynamics, and midcap valuations pose risks. But for now, Dalal Street looks well-placed to march into the festive season with confidence.
Yet, prudence is warranted. Tariffs, global oil dynamics, and midcap valuations pose risks. But for now, Dalal Street looks well-placed to march into the festive season with confidence.