Index Update: The Nifty 50 declined 78.25 points to close at 26,250.30, easing from its record high but still holding above the 26,000 level. The index continues to trade above its 50-day SMA at 25,960.58, offering near-term support, while the RSI at 58.79 signals improving momentum. Immediate support is seen around 25,500, with resistance near 26,500. A sustained move above 26,350 would be needed to further strengthen near-term sentiment.

Macro Update:  India’s 10-year government bond yield climbed above 6.6%, reaching a two-week high as investors reacted to the prospect of record state-level borrowing and weakening market liquidity. State governments are set to raise about ₹5 trillion during the January–March quarter, the highest ever for a single quarter, beginning with an auction of ₹301 billion. This surge in supply has made traders wary about the market’s ability to absorb bonds smoothly, prompting persistent selling in recent weeks. At the same time, liquidity conditions have tightened significantly, with the banking system’s daily surplus falling sharply from November levels, reducing the capacity of banks to support bond demand.

Top Market Movers: On Monday, Nestle (NSE: NESTLEIND) led the gainers with a 2.76% increase, closing at INR 1,315.00 followed by Bharat Electronics Limited (NSE: BEL) up 2.53% at INR 413.35 and Eicher Motors Limited (NSE: EICHERMOT) which rose 2.17% to INR 7,494.00. On the downside HDFC Bank (NSE: HDFCBANK) saw the largest drop, falling 2.31% to INR 978.50 followed by Wipro Limited (NSE: WIPRO) down 2.23% to INR 263.00 and Infosys Limited (NSE: INFY), which dropped 2.21% to INR 1,604.10.

Commodity Update: The U.S. dollar began the first full trading week of the new year on a firm note, hitting a three-and-a-half-week high against the euro and strengthening versus sterling, while overall moves stayed modest. Sentiment was influenced by the U.S. capture of Nicolas Maduro. Gold surged 2.09% to USD 4,420.10, silver jumped 6.27% to USD 75.44, and copper climbed 2.62% to USD 12,844.00. Brent crude rose 0.30% to USD 60.90, as markets assessed Venezuela developments and OPEC+ keeping output unchanged amid geopolitical tensions.

Our Stance: Investor sentiment has remained fragile despite the Reserve Bank of India announcing a ₹500 billion bond purchase to stabilise the market, as lenders are expected to demand higher yields to compensate for the heavy supply. Foreign investors have also stayed cautious after sizeable bond outflows in December, a trend reinforced by the rupee’s recent weakness. Looking ahead, analysts believe the benchmark yield could edge closer to 6.7% if demand continues to soften. Market participants are additionally factoring in global uncertainties, including geopolitical tensions and the risk of fresh US tariffs, which have kept traders on edge even as foreign investors briefly returned to Indian equities after a prolonged selling streak.

Disclaimer:

The information available on this article is provided for education and informational purposes only. It does not constitute or provide financial, investment or trading advice and should not be construed as an endorsement of any specific stock or financial strategy in any form or manner. We do not make any representations or warranties regarding the quality, reliability, or accuracy of the information provided. This website may contain links to third-party content. We are not responsible for the content or accuracy of these external sources and do not endorse or verify the information provided by third parties. We are not liable for any decisions made or actions taken based on the information provided on this website.

Copyright 2025 Krish Capital Pty. Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.