CapitalKeeper Sunday Digest (4–8 Aug 2025): Mid & Small-Cap Surge, Global Cues, and Market Outlook

By CapitalKeeper | Pre Market Opening | Indian Equities | Market Moves That Matter

CapitalKeeper Sunday Digest – Week of 4th to 8th August 2025

The first full week of August 2025 turned out to be a tale of two markets—a cautious, range-bound Nifty and Sensex weighed down by global uncertainty, and an energetic rally in mid-cap and small-cap segments that lit up investor sentiment. Add to that a cocktail of global cues, earnings surprises, and sector-specific triggers, and we had a week that tested both short-term traders and long-term investors.

This week’s CapitalKeeper Sunday Digest breaks down the key movements, explores the underlying trends, and sets the stage for what could be an eventful second week of August.

1. Weekly Market Recap – The Numbers That Matter

Opening Levels (Mon, 4 Aug):

Nifty 50: 24,596.05
Sensex: 80,765.83
Bank Nifty: 55,557.50
Fin Nifty: 26,507.20

Closing Levels (Fri, 8 Aug):

Nifty 50: 24,363.30 (-0.95%)
Sensex: 79,857.79 (-1.12%)
Bank Nifty: 55,004.90 (-0.99%)
Fin Nifty: 26,167.35 (-1.28%)

Despite the headline indices closing lower for the week, BSE Midcap Index and BSE Smallcap Index surged to new highs, clocking 2–3% weekly gains.

2. Global Cues – A Choppy Backdrop

Global markets provided a mixed and volatile backdrop this week:

US Markets: Dow Jones and S&P 500 started the week weak on the back of disappointing tech earnings and a hawkish tilt in the US Fed’s commentary. However, a late-week rebound came as fresh US jobs data hinted at a cooling labour market, reviving hopes of a rate cut in Q4 2025.
Crude Oil: Brent prices remained steady around $78–80 per barrel, balancing supply concerns from geopolitical tensions with demand worries from slower Chinese industrial growth.
Dollar & Bond Yields: The US Dollar Index eased slightly to 103.5, while US 10-year yields hovered near 4.15%, keeping FIIs cautious.
Asian Markets: Japan’s Nikkei corrected after a multi-week rally, while Shanghai Composite gained on fresh stimulus announcements from Beijing.

The takeaway? Global sentiment remains on edge, but selective optimism is creeping back, especially if US macro data softens further.

3. Sector-wise Action – Where the Money Moved

Mid-Cap & Small-Cap Fireworks

Heavy participation from domestic institutions and retail investors pushed mid and small-cap stocks to lifetime highs.
Strong earnings from mid-tier IT companies, niche manufacturing players, and chemical firms drove interest.
Thematic buying was seen in defence, railway ancillaries, and renewable energy.

Banking & Financials – A Breather

Bank Nifty underperformed as profit booking hit frontline PSU and private banks after the previous week’s strong rally.
NBFCs and microfinance stocks held better, supported by strong Q1 FY26 earnings.

FMCG & Consumer Durables – Mixed Trends

Select FMCG names saw buying interest on rural recovery hopes.
White goods companies corrected after a summer demand slowdown.

Metals & Energy – Pause Mode

Global metal prices softened mid-week, impacting ferrous stocks.
OMCs were range-bound despite stable crude prices.

4. Earnings Highlights – Hits & Misses

IT Mid-Tier Outperformance: Companies in the ₹10,000–₹50,000 crore market cap bracket surprised with strong deal wins and margin improvements, outshining large-cap peers.
Auto Ancillaries: Several Tier-2 suppliers reported record order books, driven by EV and export demand.
Cement: Margins improved sequentially due to lower pet coke and freight costs, but volume growth varied regionally.

5. Key Domestic Triggers This Week

RBI Policy Outcome (6 Aug): The central bank maintained the repo rate but struck a cautious tone, reiterating its commitment to managing inflation while supporting growth.
GST Collections: July GST collections stood at ₹1.72 lakh crore, up 11% YoY, reflecting healthy consumption trends.
FII/DII Flows:
- FIIs: Net sellers worth ₹3,200 crore.
- DIIs: Net buyers worth ₹4,500 crore, cushioning the market.

6. Technical View – Nifty & Bank Nifty

Nifty 50: The index slipped below 24,400 briefly but held above its 20-DMA (~24,350), suggesting near-term support. Resistance remains at 24,650–24,700.
Bank Nifty: Facing stiff resistance near 55,600, with immediate support at 54,800.

Momentum Indicators:

RSI on Nifty has cooled to ~54 (neutral zone).
MACD signals mild bearishness but no strong breakdown yet.

7. How the Next Week Could Play Out (11–15 Aug 2025)

Looking ahead, the market’s trajectory will depend on a mix of domestic triggers and global risk sentiment:

Mid & Small-Cap Momentum: Likely to continue if earnings remain strong and domestic liquidity persists.
Global Cues: Watch for US inflation data and China’s trade numbers—both can swing commodity and currency markets.
Nifty Range: 24,250–24,700 likely. A breakout above 24,700 could reignite momentum; a breakdown below 24,250 may trigger deeper correction.
Key Sectors to Watch: Defence, renewable energy, mid-tier IT, and consumer discretionary.

8. CapitalKeeper Observation – The Bigger Picture

This week’s price action reinforces a few important takeaways:

Liquidity-Driven Divergence: Even with headline indices consolidating, domestic liquidity can push mid & small caps higher.
Sector Rotation in Play: Leadership keeps shifting—what underperformed last month may shine next week.
Risk Management Vital: The rally in smaller stocks has been sharp; investors should avoid chasing without fundamentals.

9. Closing Note

The week ended with a sense of cautious optimism. While Nifty and Sensex look to be in a healthy consolidation, the real excitement lies in the broader market. If global conditions don’t throw a major curveball, the upcoming week could see continued selective outperformance in mid and small caps.

At CapitalKeeper, we believe discipline, data, and patience will be key to navigating this phase. Whether you are a short-term trader or a long-term investor, the next few weeks are likely to reward those who combine conviction with caution.

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Ranjit Sahoo
Founder & Chief Editor – CapitalKeeper.in

Ranjit Sahoo is the visionary behind CapitalKeeper.in, a leading platform for real-time market insights, technical analysis, and investment strategies. With a strong focus on Nifty, Bank Nifty, sector trends, and commodities, she delivers in-depth research that helps traders and investors make informed decisions.

Passionate about financial literacy, Ranjit blends technical precision with market storytelling, ensuring even complex concepts are accessible to readers of all levels. Her work covers pre-market analysis, intraday strategies, thematic investing, and long-term portfolio trends.