Nifty Slips as Global Risks and Weak PMI Data Weigh

Index Update: The Nifty 50 Index closed near 23,824.10 while remaining above its 63-day SMA near 23,677.30, indicating that the broader market structure continues to remain stable despite the latest decline. Recent price action reflects some profit-taking after the recent recovery phase, with the index retreating from higher levels. The 14-day RSI stood near 51.91 and remained above its average of 49.56, suggesting neutral-to-positive momentum conditions. Immediate support is placed near 23,585.86 and 23,347.62, representing approximately 1% and 2% below the closing level. On the upside, resistance is seen around 24,062.34 and 24,300.58, representing approximately 1% and 2% above the closing level. A decisive move beyond these levels could influence the near-term market direction.

Macro Update: India’s 10-year government bond yield hovered near 6.8%, pausing its recent decline as lower crude oil prices and robust foreign inflows supported bond demand. However, uncertainty surrounding the US-Iran situation, inflation risks from El Niño, and elevated global yields capped gains. Investors also await Bloomberg’s decision on Indian bond index inclusion.

Top Market Movers: On Tuesday, Cipla Limited (NSE: CIPLA) led the gainers with a 1.23% increase, closing at INR 1,433.10 followed by Dr. Reddy's Laboratories Limited (NSE: DRREDDY)  up 0.82% at INR 1,301.30 and Power Grid Corporation of India Limited (NSE: POWERGRID) which rose 0.76% to INR 291.95. On the downside followed Infosys Limited (NSE: INFY) saw the largest drop, falling 3.39% to INR 1,029.30 followed Tata Consultancy Services Limited (NSE: TCS) down 3.21% to INR 2,059.60 and Adani Enterprises Limited (NSE: ADANIENT) which dropped 3.16% to INR 2,962.90.

Commodity Update: The U.S. dollar surged to an over one-year high on Tuesday as growing expectations of a hawkish Federal Reserve outweighed easing geopolitical concerns and lower oil prices. Sterling remained in focus following developments surrounding British Prime Minister Keir Starmer’s resignation. Gold fell 1.02% to USD 4,159.20, while silver declined 3.51% to USD 63.29 and copper slipped 0.61% to USD 13,571.20. Brent crude oil gained 0.38% to USD 78.15 after the previous session’s sharp decline, as investors monitored U.S.-Iran peace talks and awaited clearer signals on crude flows through the Strait of Hormuz.

Our Stance: India’s growth momentum showed signs of moderation in June as PMI indicators softened across manufacturing and services. Persistent cost pressures, slower demand, and weaker business confidence suggest a cautious near-term outlook. However, easing inflation pressures, stable bond yields, and continued economic expansion provide support to the broader macro environment.

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