22nd August 25 Daily Market Report
22/08/2025
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Markets Trade Cautiously Above 25,000 Mark Ahead of Fed Jackson Hole Meet
Thursday, August 21, 2025 – Nifty Holds Key Support As Global Cues Remain Mixed
Quick Market Snapshot
Market Sentiment & Overview
Indian equity markets opened on a flat-to-positive note on Thursday, August 21, 2025, with benchmark indices showing resilience despite mixed global cues. The Fear & Greed Index reading of 47.36 indicates markets are in the fear zone but notably improved from last week’s extreme fear level of 18.53, suggesting gradual stabilization in investor sentiment.
GIFT Nifty futures are trading at 25,081.5 with a marginal gain of 1.5 points (+0.01%), indicating a flat opening for the cash market. The muted pre-market activity reflects the cautious stance adopted by market participants ahead of the crucial Federal Reserve’s Jackson Hole symposium beginning today through August 23.
Global markets presented mixed signals overnight. Asian markets showed divergence with Japan’s Nikkei 225 down 0.59% at 42,634.01, while South Korea’s KOSPI rose 0.75% to 3,153.5. Hong Kong’s Hang Seng traded flat at 25,177.01, and Australia’s ASX 200 gained 0.59% to 8,970.7. European markets from Wednesday showed Germany’s DAX down 0.60% at 24,276.97, while UK’s FTSE 100 gained 1.08% to 9,288.14.
The day’s key market-moving events center around Fed Chair Jerome Powell’s highly anticipated speech at Jackson Hole, which could provide crucial guidance on the September rate cut trajectory. Additionally, ongoing earnings announcements and strong IPO activity continue to influence sentiment, with Vikram Solar’s IPO subscription reaching 4.73 times on day two of its offering.
Indian Markets Deep Dive
The Nifty 50 index closed Wednesday’s session at 25,050.55, gaining 69.90 points or 0.28%, marking its fifth consecutive session of gains. The index successfully held above the psychologically important 25,000 level, with the previous session showing a gain of 213.45 points. The Sensex mirrored this strength, closing at 81,857.84, up 213.45 points or 0.26%.
From a technical perspective, the Nifty has formed a bullish candle with a breakout above a falling trendline. The index is trading above its 10-day EMA and showing positive momentum indicators. The 20-day and 50-day EMAs are rising, with MACD and RSI supporting bullish momentum. Immediate resistance is seen at 25,200-25,250 levels, while support exists at 24,850-24,900 zones.
Sectoral performance on Wednesday showed clear divergence. IT stocks led with a 2.69% gain, followed by FMCG (+1.39%), Realty (+1.06%), and Services (+0.50%). On the downside, Media stocks faced maximum pressure (-1.98%), followed by Financial Services (-0.44%), Pharma (-0.44%), and Banking (-0.30%). This rotation suggests investors are moving towards defensive sectors amid global uncertainties.
Bank Nifty underperformed, closing at 55,698.5, down 166.65 points or 0.30%. The banking index continues to trade below its 20-day and 50-day EMAs, holding only above the 10-day EMA. Key banking stocks like IndusInd Bank (-0.93%) and Bank of Baroda (-0.88%) led the decline, while Canara Bank (+0.55%) provided some support.
Options data reveals interesting positioning dynamics. Maximum Call Open Interest is at 25,500 strike (indicating resistance), with strong Call writing observed at 25,100 and 25,050 levels. Maximum Put OI at 25,000 provides crucial support. The Put-Call Ratio (PCR) stands at 1.35, the highest since June, reflecting strong bullish positioning among derivatives traders.
India VIX continues its declining trend at 11.79, down 0.01 or 0.04%, marking its third consecutive day of decline. The sub-12 VIX level suggests low expected volatility over the next 30 days, typically a positive environment for equity investments.
Volume analysis shows healthy participation with advances outnumbering declines. Among individual stocks, top gainers included Dabur India (Long Buildup with 18.94% OI change), Ola Electric (volume spike of 18.69%), and Carborundum Universal (+13.82%). Major losers included LIC Housing Finance (Short Buildup with -6.67% OI change) and Aurobindo Pharma (-3.97%).
FII/DII flow dynamics showed divergence with FIIs being net sellers at ₹634.3 crores on Tuesday, while DIIs provided crucial support with purchases worth ₹2,261.1 crores. Monday’s data showed FIIs buying ₹550.8 crores while DIIs bought ₹4,103.8 crores, indicating strong domestic institutional support.
Global Markets Roundup
US markets ended Wednesday’s session on a mixed note. Based on the latest available data, the S&P 500 has been hovering around 6,400 levels with recent sessions showing consolidation. The Dow Jones Industrial Average touched 44,938.31, while the Nasdaq Composite faced pressure around 21,172.86 levels, primarily due to profit-booking in technology stocks.
The Federal Reserve’s July meeting minutes revealed that most officials considered inflation risks more serious than labor market concerns. This has tempered immediate rate cut expectations, though markets still price in high probability of September easing based on CME FedWatch Tool data.
Asian markets in Thursday’s early trade show mixed sentiment. The divergence reflects varying responses to overnight cues and regional economic factors. China’s markets remain under pressure from property sector concerns and regulatory uncertainties, while Japanese markets grapple with yen strength implications.
European Central Bank policy expectations and energy concerns continue to influence European markets. The region faces challenges from slowing growth indicators and persistent inflation concerns, keeping the ECB in a hawkish stance despite growth headwinds.
Key global themes include ongoing semiconductor sector dynamics, with reports of potential chip export arrangements between US companies and China. Corporate earnings season continues with retail sector results providing mixed signals about consumer health. The Jackson Hole symposium remains the primary focus for global markets.
Market sentiment indicators suggest institutional investors are positioning cautiously, with sector rotation from growth to value continuing. The VIX in the US has shown recent decline, suggesting reduced near-term volatility expectations, though geopolitical risks remain elevated.
Commodities & Currency Markets
Crude oil showed resilience with WTI trading around $62.43/barrel and Brent at $66.89/barrel based on recent data. Oil prices gained support from lower US inventory data and ongoing supply concerns from OPEC+ production dynamics. The energy complex remains supported by seasonal demand factors and geopolitical risk premiums.
Gold consolidated around $3,342.75 per troy ounce, maintaining support above the $3,300 psychological level. Despite daily fluctuations, the precious metal continues to benefit from its safe-haven appeal, with year-over-year gains of approximately 34%, significantly outperforming equity markets. Silver showed relative strength, supported by industrial demand.
Base metals posted gains with copper, aluminum, and zinc benefiting from improved demand expectations and supply constraints. Copper’s performance particularly reflects green energy transition demand and infrastructure spending expectations globally.
Agricultural commodities presented mixed trends. Wheat and corn prices faced pressure from improved weather conditions in key growing regions, while sugar remained supported by production concerns in Brazil and India. Cotton faced headwinds from improved crop prospects.
In the currency markets, USD/INR traded around 87.02-87.11 levels, showing remarkable stability despite FII outflows. The rupee’s resilience reflects RBI’s active intervention and strong domestic fundamentals. The day’s expected trading range is 87.40-87.64, suggesting controlled volatility.
The Dollar Index movements continue influencing emerging market currencies. Recent dollar strength has created headwinds for EM assets, though any dovish signals from the Fed could reverse these trends. Cross-currency pairs like EUR/INR and GBP/INR showed varied movements based on respective central bank policy expectations.
Commodity-currency correlations remain evident with commodity exporters’ currencies tracking raw material prices. The Canadian Dollar and Australian Dollar movements closely mirror oil and base metal trends respectively.
Cryptocurrency Markets
The cryptocurrency market showed mixed signals with Bitcoin trading around $113,500-$114,000 levels, down approximately 0.33% for the day but maintaining above the psychologically important $110,000 support. The leading cryptocurrency has shown resilience despite recent volatility, with year-to-date gains remaining substantial. The total crypto market capitalization holds above $3 trillion, reflecting continued institutional and retail interest.
Ethereum traded around $4,288, showing a modest gain of 1.41% as the network continues to benefit from ongoing Layer 2 adoption and DeFi activity. Gas fees remain manageable, though still a concern for smaller transactions. The ETH/BTC ratio movements suggest some rotation back into Ethereum from Bitcoin.
The broader altcoin market displayed varied performance with Solana (SOL) up 1.81% at $185, BNB gaining 2.54% to $852, and Cardano (ADA) advancing 2.54% to $0.88. This divergence reflects project-specific developments and varying investor sentiment across different blockchain ecosystems.
Notable corporate developments include Strategy’s continued Bitcoin accumulation, having acquired 430 BTC for $51.4 million recently, bringing their total holdings to 629,376 BTC worth over $72 billion at current prices. Additionally, SoFi Technologies announced it will become the first US bank to integrate Bitcoin Lightning Network for international transfers.
Technical analysis shows Bitcoin facing resistance at the recent high of $124,517 reached on August 14, 2025, with support levels at $110,000 and $105,000. Trading volumes remain healthy at over $37 billion in 24-hour volume, though below peak levels seen during the recent rally.
Regulatory developments continue influencing sentiment, with Brazil scheduling its first public hearing on establishing a $19 billion national strategic Bitcoin reserve for August 20. The “great wealth transfer” thesis continues gaining traction, with Xapo Bank suggesting over $200 billion could flow into Bitcoin as wealth transfers from baby boomers to younger generations.
On-chain metrics reveal interesting dynamics with two mining pools controlling over 51% of Bitcoin’s hashrate, raising centralization concerns. Meanwhile, whale activity shows some rotation, with reports of ancient Bitcoin holders swapping BTC for ETH, suggesting evolving market dynamics among long-term holders.
Section 6: Economic Calendar & Advanced Indicators
Today’s economic calendar focuses primarily on the Federal Reserve’s Jackson Hole symposium commencement. Fed Chair Powell’s speech timing remains the key event that could significantly impact global markets. Any hints about the September FOMC meeting trajectory will be closely parsed by market participants.
In India, focus remains on ongoing corporate earnings with several mid-cap companies scheduled to announce results. Core sector data and high-frequency indicators continue to paint a mixed picture of economic recovery, with services showing strength while manufacturing faces headwinds.
The Economic Surprise Index suggests recent data has been coming in line with expectations, reducing volatility from data surprises. Leading indicators including PMI data expected later this week could provide insights into economic momentum heading into the festive season.
Inflation expectations remain relatively anchored based on bond market indicators, though above RBI’s target range. The 10-year government bond yield movements suggest markets are pricing in a prolonged pause in rate cuts, with fiscal concerns also influencing yields.
Labor market indicators show resilience with IT sector hiring picking up, though overall job creation remains below pre-pandemic trends. Wage growth in organized sector remains moderate, helping contain service sector inflation pressures.
High-frequency data including GST collections, e-way bills, and power consumption suggest economic activity remains robust, though growth momentum has moderated from earlier highs. Credit growth continues at healthy pace, supporting consumption and investment cycles.
Intermarket Analysis
Bond-equity correlations show interesting dynamics with both asset classes facing pressure during global risk-off episodes. The 10-year US Treasury yield movements continue to heavily influence global equity valuations, particularly for high-multiple growth stocks.
Commodity-currency linkages remain strong, evidenced by correlations between crude oil prices and CAD/USD, as well as base metals and AUD/USD pairs. These relationships provide trading opportunities for macro-focused investors.
Risk-on/risk-off sentiment shifts are clearly visible in sector performance. Defensive sectors like FMCG and IT are attracting flows during uncertain periods, while cyclicals like banks and metals see buying during risk-on phases.
The sector rotation from growth to value continues, though not linearly. Technology stocks’ recent underperformance relative to traditional sectors suggests this rotation may have further room to run, particularly if interest rates remain elevated.
Style factor performance shows quality and low-volatility factors outperforming, reflecting investor preference for stability in uncertain times. Large-caps maintain their edge over mid and small-caps, indicating flight to safety continues.
Cross-asset correlations suggest diversification benefits remain intact, though correlations tend to spike during stress periods. Alternative investments including gold and real estate continue to attract allocations as portfolio diversifiers.
Sentiment & Positioning Data
COT (Commitment of Traders) reports suggest speculative positioning remains relatively balanced across major assets, without extreme readings that typically precede major reversals. This supports the view of continued range-bound trading near-term.
Fund flow data shows equity funds continue to see inflows, though the pace has moderated. Sectoral funds focused on technology and healthcare have seen outflows, while value and dividend-focused funds attract investments.
Insider trading patterns show mixed signals with some promoters increasing stakes while others trim positions. This divergence reflects company-specific dynamics rather than broad market directional bets.
Short interest data remains within normal ranges for most stocks, suggesting no significant bearish positioning buildup. The most shorted stocks continue to be those with fundamental challenges rather than broad market hedges.
Margin debt levels have stabilized after reaching concerning levels earlier, suggesting leverage in the system has normalized. This is generally positive for market stability and reduces forced selling risks.
Social sentiment analysis from financial platforms shows retail investor engagement remains healthy but not euphoric. The absence of excessive speculation typical at market tops suggests potential for continued upside once global uncertainties clear.
Market Outlook & Key Takeaways
Bottom Line: Indian markets continue showing resilience with Nifty maintaining above the crucial 25,000 level despite global headwinds. The improving Fear & Greed Index suggests sentiment is gradually stabilizing, though caution prevails ahead of the Fed’s Jackson Hole symposium.
Key Levels to Watch:
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Opportunities:
Markets appear to be in a healthy consolidation phase, building a base for the next directional move. The technical setup remains constructive with key supports holding. Investors should maintain disciplined position sizing and use any Fed-induced volatility as an opportunity to accumulate quality stocks for long-term portfolios.
Disclaimer: This report is for informational purposes only and should not be considered as investment advice. Market conditions can change rapidly. Always consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.
Risk Disclosure: Trading in financial markets involves substantial risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade, carefully consider your investment objectives, level of experience, and risk appetite.
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