Nifty Extends Recovery as Bond Yields Ease, Financial Stocks Rally

Index Update: The Nifty 50 Index closed near 24,383.60, remaining above its 50-day SMA of 23,903.88, indicating that the medium-term technical structure continues to strengthen. Recent price action reflects a continuation of the recovery, with the index holding above its moving average and trading near the upper end of its recent range. The 14-day RSI stood at 59.21, suggesting improving momentum with a positive bias while remaining below overbought territory. Immediate support is placed near 24,260.00 and 24,140.00, while resistance is seen around 24,510.00 and 24,630.00. A sustained move beyond these levels could influence the index's next directional trend.

Macro Update: India’s 10-year G-Sec yield eased to around 6.8%, supported by softer crude oil prices and lower US Treasury yields. Brent crude declined to nearly $87.7 per barrel, easing inflation concerns, while the US 10-year yield slipped to around 4.65%. However, domestic bond gains remained capped ahead of the INR 340 billion government bond auction and the upcoming RBI policy decision.

Top Market Movers: On Friday, Bajaj Finance Limited (NSE:BAJFINANCE) led the gainers with a 8.32% increase, closing at INR 1,141.20 followed by Bajaj Finserv Limited (NSE:BAJAJFINSV) up 6.27% at INR 417.20 and Jio Financial Services Limited (NSE:JIOFIN) which rose 3.72% to INR 256.46. On the downside followed Tata Consultancy Services Limited (NSE:TCS) saw the largest drop, falling 2.72% to INR 2,365.60 followed Eternal Limited (NSE:ETERNAL) down 2.64% to INR 302.45 and Max Healthcare Institute Limited (NSE:MAXHEALTH) which dropped 2.34% to INR 1,098.50.

Commodity Update: The Japanese yen weakened on Friday as investors continued to assess the impact of Japan's recent currency intervention while awaiting the Bank of Japan's upcoming policy decision for further direction. The U.S. dollar remained supported amid cautious market sentiment. Gold declined 0.44% to USD 4,082.00 per ounce, silver slipped 0.42% to USD 58.75 per ounce, and copper edged up 0.09% to USD 13,828.10 per metric ton. Brent crude oil rose 0.70% to USD 89.64 per barrel as renewed military clashes between the United States and Iran, along with widening regional tensions, intensified concerns over potential disruptions to Middle East oil supplies.

Our Stance: Market sentiment remains cautiously positive, supported by improving Nifty 50 momentum and easing domestic bond yields. Softer crude prices provide some macro relief, although geopolitical tensions, volatile commodities, and upcoming RBI policy decisions remain key considerations. Sustained movement above near-term resistance could reinforce the positive market outlook, while downside risks remain monitored.

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