Stock Market Outlook July 7: Nifty & Sensex May See Volatility on US Tariff Deadline, Q1 Results & Global Cues

At the end of the last trading day on July 4, both major Indian stock indices closed with slight gains. The Nifty 50 rose by 0.22%, finishing at 25,461, while the Sensex increased by 0.23%, ending the day at 83,432. These modest gains reflect a steady performance in the market, supported by select heavyweight stocks, despite cautious investor sentiment.

Top Stocks and Sectors to Watch Before Today's Opening Bell

Strong performance by major companies like Bajaj Finance, Infosys and ICICI Bank supported the market last week, even though investors were cautious due to mixed signals from global markets.

Top Losers Led by Trent

Trent Ltd was the biggest loser of the day, falling by nearly 12%. This had a negative impact on the retail sector. Other stocks like Tata Steel, Eicher Motors and Tech Mahindra also dropped, putting pressure on metal and auto shares.

Sector-wise Stock Performances

On a sector-wise basis, the market showed broad strength, with most major sectoral indices ending the day in positive territory. The only exceptions were Nifty Auto and Nifty Metal, which registered minor declines due to profit booking and weaker global cues. Meanwhile, sectors such as Oil & Gas, Realty, Pharmaceuticals, and Information Technology (IT) witnessed strong buying interest.

Defence Shares Surge After DAC Approves Rs 1.05 Lakh Crore Procurement

Shares in Indian defence companies surged after the Defence Acquisition Council (DAC) gave the green light to domestic procurement projects worth Rs 1.05 lakh crore, aimed at enhancing local defence production under the 'Make in India' initiative.

The move boosted stocks such as Paras Defence, BEML, Bharat Dynamics (BDL), and Hindustan Aeronautics Ltd (HAL), which rose by up to 9% during the day. The Nifty India Defence index climbed 1.7%, signalling strong investor interest and support for the government's push toward defence self-reliance and indigenisation.

Private Banks Add Rs 4 Lakh Crore in Market Capitalisation

India's major private sector banks namely HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank saw a combined increase of over Rs 4 lakh crore in market capitalisation during 2025, reflecting growing investor confidence in the banking sector.

HDFC Bank led the rally, supported by robust earnings, rising credit demand and continued institutional buying. This growth reflects the sector's improving fundamentals and highlights renewed optimism in the performance and stability of large private banks within a strengthening economic landscape.

Global Markets Stay Weak

Global market trends were not very encouraging, US stock markets ended lower, with all three major indexes closing in the red. The broad-market index fell by 0.64%, finishing the day at 5,650.38. The Nasdaq Composite, which is heavily weighted with tech stocks, dropped 0.74% to close at 17,844.24. Meanwhile, the Dow Jones Industrial Average slipped by 98.60 points, or 0.24%, ending the session at 41,218.83.

While China's Shanghai Composite rose slightly, Hong Kong's Hang Seng and key European indices were down.

Equity Markets Face Crucial Week as Key Events Approach

Trump Tariff 90-Day Suspension To End: Indian stock markets are entering an important week with several major events expected to influence investor sentiment. One of the biggest factors is the upcoming end of the 90-day suspension of reciprocal tariffs that were initially imposed by former US President Donald Trump. This temporary suspension is set to expire on July 9, and the outcome of trade discussions between India and the United States could have a major impact on the market.

If both countries reach a positive trade agreement, it could improve investor confidence and benefit sectors like IT, pharmaceuticals, and automobiles, which are heavily dependent on exports. On the other hand, if talks fail and tariffs are reimposed, market sentiment could turn negative, affecting not just Indian stocks but also markets globally.

Q1 Earnings Season Begins

In India, attention will also shift to the start of the Q1 corporate earnings season. Companies like Tata Consultancy Services (TCS) and Avenue Supermarts are among the first to announce their results. These earnings reports will help investors assess the current financial health of Indian businesses.

Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd noted "Overall, we expect the market to remain in consolidation mode, awaiting clarity on the India-US trade deal; while stock specific action would continue on the back of Q1 FY26 business updates ahead of the earnings season starting this week."

Disclaimer

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