Nifty Extends Gains as Lower Bond Yields Support Market Sentiment

Index Update: The Nifty 50 Index closed near 24,430.35, remaining above its 50-day SMA around 23,823.83, indicating a stable medium-term technical structure. Recent price action reflects continued strength, with the index extending its recovery and closing near its recent highs. The 14-day RSI stood at 64.11, suggesting strengthening momentum while remaining below overbought territory. Immediate support is placed near 24,186.05 and 23,941.75, while resistance is seen around 24,674.65 and 24,918.96. A sustained move beyond these levels could provide greater clarity on the index's next directional trend.

Macro Update: India's 10-year government bond yield declined to around 6.69%, its lowest level in nearly four months, supported by strong foreign inflows, improving monsoon conditions, and softer crude oil prices. Expectations of global bond index inclusion and easing inflation concerns boosted demand, while investors awaited the Federal Reserve's meeting minutes for policy guidance.

Top Market Movers: On Monday, HDFC Bank Limited (NSE:HDFCBANK) led the gainers with a 3.60% increase, closing at INR 829.85 followed by Hindalco Industries Limited (NSE:HINDALCO) up 2.85% at INR 980.40 and Bajaj Auto Limited (NSE:BAJAJ-AUTO) which rose 2.57% to INR 10,036.50. On the downside followed Kotak Mahindra Bank Limited (NSE:KOTAKBANK) saw the largest drop, falling 3.89% to INR 381.30 followed Max Healthcare Institute Limited (NSE:MAXHEALTH) down 1.81% to INR 1,132.50 and Tata Consultancy Services Limited (NSE:TCS) which dropped 1.71% to INR 2,057.60.

Commodity Update: The U.S. dollar remained steady near a two-week low as market participants reduced expectations of a Federal Reserve interest rate hike this year, weighing on the currency. Precious metals strengthened, with gold rising 1.36% to USD 4,182.20 and silver advancing 2.19% to USD 62.41, supported by the softer dollar. Copper edged up 0.14% to USD 13,400.00. Meanwhile, Brent crude oil gained 0.20% to USD 71.96 after OPEC+ approved higher production targets for August while exports through the Strait of Hormuz continued normalizing.

Our Stance: The Nifty 50 continues to exhibit a constructive technical setup, supported by easing bond yields, resilient foreign inflows, and improving macroeconomic conditions. While momentum remains positive, investors should monitor key resistance levels and upcoming global policy signals, particularly the Federal Reserve minutes, which may influence near-term market direction and risk sentiment.

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