Weekly Market Report 18 Aug 2025 to 22 Aug 2025 | Scrolls

by KarNivesh | 23 August, 2025

India Financial Markets Weekly Report_ August 18-22- Scrolls.pdf

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Overview The week of August 18–22, 2025, was eventful for Indian financial markets, reflecting both domestic strength and global uncertainty. Despite concerns about U.S. tariffs and Federal Reserve policy, Indian markets held up well thanks to strong economic fundamentals and support from domestic investors. The Nifty 50 closed at 24,870 (up 0.97%) and the Sensex ended at 81,307 (up 0.87%), though profit booking on Friday caused some decline. Gains earlier in the week were driven by India’s sovereign credit rating upgrade (from BBB– to BBB) and proposed GST reforms. Sector-wise, Healthcare led with a 3.6% gain, followed by Automobiles (2.7%) and Defence (2.6%), while Consumer Durables (–0.6%) and FMCG (–0.45%) faced mild pressure.

Globally, markets were volatile ahead of U.S. Fed Chair Jerome Powell’s Jackson Hole speech, where he hinted at possible rate cuts. This boosted U.S. indices on Friday, with the Dow jumping over 900 points. Powell’s remarks weakened the U.S. dollar, and Indian markets responded cautiously. In Asia, Japan’s Nikkei rose slightly, Hong Kong’s Hang Seng gained nearly 1%, and China’s Shanghai Composite also edged higher.

India’s economic data remained strong. CPI inflation for July dropped to 1.55%, its lowest since 2017, while WPI inflation stayed negative (–0.58%), reflecting cheaper food and fuel. GDP growth stood at 7.4% in Q4 FY25, with forecasts of 6.4–6.7% growth for FY26 due to strong domestic demand and stable monetary policy. The RBI kept its repo rate steady at 5.5%, having already cut 1% earlier in the year, and lowered its FY26 inflation projection to 3.1%.

Corporate earnings were mixed. ONGC posted an 18% profit jump to ₹11,554 crore, while Adani Power reported ₹13,703 crore in revenues. Manufacturing showed strong momentum, with the HSBC PMI hitting 59.8, the best since 2008. IPO activity was vibrant: Vikram Solar launched a ₹2,079 crore IPO, and several others like Patel Retail and Shreeji Shipping also tapped the market. The SME IPO space remained active with 144 IPOs in 2025, raising ₹6,719 crore.

Currency and bond markets saw some volatility. The rupee traded between 86.94 and 87.55 per U.S. dollar, ending at 87.54, while forex reserves stayed robust at about ₹61.5 lakh crore (converted from $702.8 billion). Bond yields rose slightly, with the 10-year benchmark at 6.56%, reflecting fiscal concerns over proposed GST rate cuts. Foreign Portfolio Investors sold ₹25,751 crore worth of equities in August, while Domestic Institutional Investors bought a record ₹66,184 crore, providing crucial support.

Looking ahead, key drivers include GST reform implementation, U.S. economic data, and ongoing corporate earnings. Defensive sectors like Healthcare, export-driven IT, and Make-in-India themes in Automobiles and Defence are likely to stay in focus. Despite global uncertainties, India’s low inflation, steady growth, and strong domestic investment trends make it an attractive long-term market for beginners.