Nifty Holds Firm Despite Inflation Spike and Global Geopolitical Uncertainty

Index Update: The Nifty 50 Index closed near 24,211.00, remaining above its 50-day SMA of 23,830.32, indicating that the medium-term technical structure continues to hold. Recent price action reflects consolidation following the recent recovery, with the index trading within a relatively narrow range. The 14-day RSI stood at 55.89, suggesting balanced momentum with a modest positive bias. Immediate support is placed near 24,000.00 and 23,790.00, while resistance is seen around 24,420.00 and 24,630.00. A sustained move beyond these levels could influence the index's next directional trend.

Macro Update: India's retail inflation rose to 4.38% in June 2026 from 3.93% in May, marking an 18-month high and slightly exceeding expectations. Higher transport and food prices, particularly for ginger and tomatoes, drove the increase, while housing inflation eased. Monthly CPI climbed 1.03%, the highest since January 2025.

Top Market Movers: On Monday, Tata Consultancy Services Limited (NSE:TCS) led the gainers with a 5.44% increase, closing at INR 2,181.50 followed by HCL Technologies Limited (NSE:HCLTECH) up 4.91% at INR 1,221.20 and Tech Mahindra Limited (NSE:TECHM) which rose 3.42% to INR 1,504.50. On the downside followed Grasim Industries Limited (NSE:GRASIM) saw the largest drop, falling 2.16% to INR 3,144.30 followed Tata Steel Limited (NSE:TATASTEEL) down 2.13% to INR 187.11 and Nestlé India Limited (NSE:NESTLEIND) which dropped 1.94% to INR 1,427.00.

Commodity Update: The U.S. dollar strengthened against most major currencies on Monday after renewed tensions in the Middle East heightened inflation concerns and reinforced expectations that central banks could keep interest rates higher for longer. Gold declined 0.96% to USD 4,073.70 per ounce, silver fell 2.48% to USD 58.68 per ounce, and copper slipped 0.85% to USD 13,387.60 per tonne. Brent crude oil traded at USD 78.46 per barrel, down 3.30%, as markets assessed supply disruption risks after Iran announced the closure of the Strait of Hormuz.

Our Stance: The market outlook remains cautiously positive as the Nifty continues to trade above its key moving average, reflecting underlying resilience. However, elevated inflation, persistent geopolitical uncertainties, and global interest rate expectations may keep volatility elevated. Sustained buying above resistance levels could support further gains, while support levels remain crucial.

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