Sensex, Nifty may struggle for direction as trade tensions rise; key levels to track on July 8

India VIX edged higher by 2, closing at 12.56, still comfortably below its psychological threshold of 15. The persistently low volatility reflects a lack of fear and suggests a stable market environment

Markets are set for another jittery session, with Nifty and Sensex likely to stay in consolidation mode as investors brace for potential fallout from Donald Trump’s sweeping tariff move. Starting August 1, imports from at least 14 countries face steep duties, adding to the nervousness on Dalal Street. Early cues were weak, with GIFT Nifty down 0.06 percent at 25,500 around 7:40 am.

Indian equities ended flat in yet another lacklustre session on July 7, with investors staying cautious ahead of fresh cues. Market sentiment remains on edge as Dalal Street awaits clarity on a potential U.S.-India trade deal, ahead of the sweeping tariffs set to be imposed by Donald Trump from August 1, 2025.

Both Foreign Institutional Investors (FII/FPI) and Domestic Institutional Investors (DII) were net buyers on July 7, with FIIs buying shares worth Rs 321 crore while domestic institutional investors (DII) were net buyers of shares worth Rs 1,853 crore.

Resistance has gradually shifted lower to the 25,500–25,600 band, a level that has witnessed heavy call writing, making it a tough ceiling. On the flip side, the 25,300 zone has emerged as a critical near-term support where the index rebounded sharply, taking support at the 10-day EMA—signalling a strong intraday reversal. A decisive close above 25,600 with strong follow-through could reignite bullish sentiment and pave the way toward the psychological 26,000 mark. Conversely, a breakdown below 25,300 could intensify selling pressure, dragging the index down toward 25,000.

"Overhead resistance has been shifting lower and now lies around 57,200–57,300 for the Bank Nifty, where heavy call writing is capping the upside. On the downside, 56,500 has emerged as a strong support. The index continues to respect its 10- and 20-day EMAs, often bouncing from these zones and forming subtle intraday reversal patterns — a sign of accumulation at lower levels," Dhupesh Dhameja of SAMCO Securities said. "A decisive move above 57,300, backed by strong volumes, could pave the way toward 57,500. However, a breach of 56,500 might trigger selling pressure and pull the index down to 56,000," he added.

India VIX edged higher by 2, closing at 12.56, still comfortably below its psychological threshold of 15. The persistently low volatility reflects a lack of fear and suggests a stable market environment, typically favouring a gradual upward grind rather than sharp moves.

The Put-Call Ratio (PCR) remains stable at 0.79, indicating a mildly bearish tone due to elevated call writing activity. The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market.