Stock Market Ends Flat After Volatile Session on July 5, 2025
The Indian stock market witnessed a volatile trading session on Friday, July 5, 2025, with benchmark indices Sensex and Nifty erasing early gains and closing flat. The market sentiment turned cautious amid global trade uncertainties and nervousness surrounding the anticipated trade agreement between India and the United States.
Sensex and Nifty End Marginally Higher but Off Day’s High
Despite opening in the green tracking positive global cues, the BSE Sensex lost significant momentum later in the day. The index rose just 193.42 points or 0.23% to close at 83,432.89, after touching an intra-day high of 83,477.86. At one point, it slipped to a low of 83,015.83, marking a swing of more than 460 points.
The NSE Nifty 50 index advanced 55.70 points or 0.22% to settle at 25,461, after breaching the 25,350 level during intraday trades. Despite the positive close, market participants remained wary amid concerns over potential tariff implications and global trade tensions.
Key Highlights:
- Sensex swings 462 points intra-day, ends at 83,432.89
- Nifty closes at 25,461, holding above key support levels
- Trade deal uncertainty weighs heavily on investor sentiment
- Banking and IT stocks provide early support before profit booking
- Global markets trade mixed following US tariff developments
US-India Trade Deal Jitters Trigger Volatility
Trump’s Tariff Comment Sparks Concerns
Market sentiment was dented after US President Donald Trump signaled that his administration would soon begin issuing letters to trade partners outlining tariff rates, a move considered part of the final phase of negotiations for multiple trade deals. Investors interpreted this as a sign of tougher trade talks ahead, especially with India being a key partner in focus.
This announcement triggered uncertainty regarding India’s pending trade agreement with the United States. Although discussions are in the advanced stage, any indication of harsh tariff conditions could adversely impact several export-focused Indian sectors.
Sectoral Performance: Mixed Trends Across Key Indices
Banking and IT Stocks Provide Support
Early in the session, banking stocks led the gains with heavyweights like HDFC Bank, ICICI Bank, and State Bank of India (SBI) witnessing buying interest. The Bank Nifty index remained resilient for most of the day before cooling off in the last hour.
The Information Technology sector also contributed to the initial rally, backed by stable demand outlooks and favorable global cues.
Auto, FMCG, and Realty Drag Down Markets
However, sectors like auto, FMCG, and realty came under pressure amid concerns about demand recovery and rising input costs. Maruti Suzuki, Tata Motors, and Nestlé India were among the top losers, pulling the indices off their highs.
Global Market Influence on Indian Equities
Asian Markets Mixed, US Futures Dip
The Indian stock market tracked global cues closely. Asian markets were mixed, with Nikkei gaining slightly while Hang Seng remained under pressure. Meanwhile, US futures declined after President Trump’s statement, indicating that Wall Street may open on a weak note.
Global investors are closely watching further developments in global trade dynamics, which are expected to shape the short-term direction of emerging markets, including India.
Expert Opinions: What Analysts Are Saying
Market experts believe that while the broader market outlook remains positive due to strong domestic macroeconomic indicators, short-term volatility is likely to persist due to external factors like global trade negotiations.
“The market is taking a breather after a strong rally. Trade tensions and uncertainty around tariff structures are prompting investors to book profits,” said Amit Shah, Head of Research at Motilal Oswal Financial Services.
“As long as Nifty stays above 25,200, the broader trend remains positive. Investors should avoid panic and focus on quality stocks,” added Sonal Bhatia, Senior Analyst at ICICI Direct.
Investor Strategy: What Should You Do Now?
Top Recommendations for Investors Amid Volatile Markets
- Avoid panic selling and stay invested in fundamentally strong companies
- Focus on large-cap blue-chip stocks during uncertain times
- Look for buying opportunities in corrections, especially in banking and IT
- Track updates on India-US trade deal negotiations closely
- Use stop-loss orders to protect capital in high-beta stocks
Outlook for Next Week: All Eyes on Trade Talks and Q1 Results
As the market heads into a new week, investors will keep a close watch on:
- Progress in India-US trade agreement
- Quarterly earnings (Q1 FY26) announcements starting next week
- US economic data releases, including jobs report and inflation data
- Movement of crude oil prices and USD-INR currency trends
- Foreign institutional investor (FII) activity in Indian equities
If trade talks proceed positively and Q1 results meet expectations, markets may resume their upward momentum. However, any disruption in global trade or disappointing corporate earnings could lead to further consolidation.
Conclusion: Trade Uncertainty Casts Shadow, But Fundamentals Remain Intact
While Sensex and Nifty closed the day marginally higher, the loss of intraday gains due to trade deal jitters reflects the fragile nature of current market sentiment. Investors are advised to stay cautious, monitor global developments closely, and remain focused on long-term fundamentals rather than short-term noise.
