Index Update: The Nifty 50 climbed 0.99% to close at 24,853.15 on Friday, staying above key moving averages, signaling continued market strength. The RSI improved to 59.33, reflecting a strengthening bullish momentum. A recent breakout above horizontal support has further reinforced the uptrend. With a solid technical setup and positive sentiment, the index shows strong potential for further gains in the near term.

Macro Update: Foreign institutional investors (FIIs), who recently drove the market rally, have abruptly turned heavy sellers, offloading equities worth Rs 15,587 crore over the past four sessions. This includes a sharp Rs 10,000 crore selloff on Tuesday, the largest in over two months, followed by another Rs 5,000 crore exit on Thursday. Experts attribute this reversal to a combination of global and domestic factors, notably the steep rise in bond yields in the US and Japan. As US Treasury yields climb, driven by concerns over the country’s growing fiscal deficit, investors are shifting funds from emerging markets to the relative safety of high-yielding bonds.

Top Market Movers: On Thursday, Eternal Limited (NSE: ETERNAL) led the gainers with a 3.63% increase, closing at INR 237.34 followed by HDFC Life Insurance Company Limited (NSE: HDFCLIFE) up 3.28% at INR 780.65, and Jio Financial Services Ltd (NSE: JIOFIN) which rose 2.49% to INR 281.40. On the downside, Sun Pharmaceuticals Industries Ltd (NSE: SUNPHARMA) saw the largest drop, falling 1.72% to INR 1,689.10 followed by Grasim Industries Ltd (NSE: GRASIM) down 0.70% to INR 2,656.00.

Commodity Update: The U.S. dollar softened on Friday, heading for its first weekly decline in five weeks against the euro and yen, as concerns over America’s $36 trillion debt and a costly tax bill dampened sentiment. Moody’s recent downgrade of U.S. debt spurred safe-haven buying. Gold dipped 0.08% to $3,291.80, silver slipped 0.05%, while copper rose 0.12%. Brent crude dropped 0.50% to $64.11 on renewed OPEC+ oversupply concerns.

Our Stance:  Nifty index appears cautious amid heightened volatility driven by foreign institutional investor (FII) outflows and global macroeconomic headwinds. While the broader trend has shown resilience supported by domestic participation and strong corporate earnings in certain sectors, the recent aggressive selling by FIIs signals potential short-term pressure. Market participants are likely to remain watchful of global bond yields, currency movements, and geopolitical developments, which could influence sentiment and capital flows. Until clarity emerges on these fronts, Nifty may trade in a consolidation range with a bias toward defensive sectors.

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