Markets in Consolidation Mode ?

Markets Overview

An eventful week saw the markets remain choppy, lacking clear direction but witnessing frequent minor trend reversals. Defense stocks continued their strong run, gaining ground amid uncertainty. However, by Friday’s close, new tariff murmurs emerged—suggestions of a 50% tariff on EU goods and a 25% tariff on Apple products assembled outside the U.S. These developments could potentially trigger volatility over the next few weeks, up until June 1 when the changes are expected to be implemented.

Despite these headwinds, the markets seem to be discounting many of these statements, especially given how frequently the U.S. President tends to backtrack on extreme stances. On the domestic front, India appears well-positioned. The RBI’s massive dividend payout of ₹2.6 lakh crore to the government will help manage the fiscal deficit effectively. Crude oil prices hovering near $60–65 are also a positive. Additionally, most Nifty companies have reported results in line with expectations, suggesting a stable earnings season.

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The markets continue to behave unpredictably, showing no consistent trend. Over the last four trading sessions, we’ve seen a pattern of going down, then up, then down again, and now up once more. Essentially, the market has been moving sideways with no net gain or loss. In fact, if you look back over the last nine sessions, the market is still hovering around the same level it was at back then. Interestingly, this stability is not a negative outcome—especially considering the pressure from foreign institutional investor (FII) selling. The fact that the markets are holding up well despite this selling pressure is encouraging.

Rebalance Update for the week