Sensex, Nifty end flat amid trade talk jitters and profit-taking, PSU Banks extend shine

Nifty 50 and Sensex were flat in trade on July 1, 2025.

Dalal Street saw a choppy session as the consolidation phase kicked in once again, following a smart rally in the previous week. The 30-share Sensex eked out 100 points, while Nifty 50 hovered close to the flatline as investors remained cautious.

At close, the Sensex was up 90.83 points or 0.11 percent at 83,697.29, and the Nifty was up 24.75 points or 0.10 percent at 25,541.80. About 1,971 shares advanced, 1,889 shares declined, and 150 shares unchanged.

Uncertainty around the ongoing India-US trade negotiations weighed on sentiment, with talks reportedly at a “sensitive stage." Sources indicated that failure to strike a deal could trigger a 26 percent tariff, raising concerns.

Markets saw a mixed sectoral trend on Tuesday. PSU banks rose 0.7 percent, leading the gainers, followed by infra and metals. On the flip side, media stocks fell 1.5 percent, while FMCG, IT, and auto also traded lower.

Public sector banking stocks extended gains from the previous session after the Finance Ministry directed state-owned lenders to monetise their stakes in subsidiaries via IPOs or strategic stake sales.

The broader markets also traded cautiously, with the Nifty Midcap 100 and Nifty Smallcap 100 shifting between gains and losses. Earlier in the session, the Nifty Smallcap and Midcap indices slipped around 0.3 percent each in the afternoon.

This pullback follows a sharp rally in recent sessions, during which the market capitalization of the midcap and smallcap indices soared by Rs 2.45 lakh crore and Rs 3.41 lakh crore, respectively, over just seven trading days.

The weakening US dollar, primarily attributed to escalating concerns over America's mounting debt burden and fiscal sustainability, is creating additional incentives for USD-based investors to explore offshore opportunities.

India's robust economic fundamentals, expanding market capitalisation and increasing inclusion in global indices make it an attractive destination for investors seeking alternatives to US market exposure, said Devarsh Vakil, Head of Prime Research, HDFC Securities.

Immediate support is now seen at 25,500, followed by 25,200, which was the upper boundary of the recent consolidation and now acts as a strong support zone. On the upside, while bulls aim for the landmark zone of 26,000–26,300, intermediate resistance may be encountered near the 25,800

level.

"Traders are advised to focus on pockets showing sustained momentum and relative outperformance, as leadership is likely to rotate in the coming sessions," said Sameet Chavan, Head Research, Technical and Derivative - Angel One.