Domestic & Global Equity Market Performance

 

Domestic equity markets extended gains for the fourth consecutive week, with Sensex up 0.31% and Nifty 50 up 0.33%, supported by optimism over a possible India–U.S. trade deal and strong Q2FY26 bank earnings. However, gains were limited by profit booking and a rise in crude oil prices following new U.S. sanctions on Russian producers.

 

 

Sectoral Highlights:

 

• IT (+3.16%): Boosted by trade deal optimism and U.S. revenue exposure.

• Metals (+1.47%): Driven by a sharp rally in aluminum prices above $2,850/tone amid supply constraints.

• Pharma gained on defensive buying, while Metals and PSU Banks saw profit booking.

• FMCG stayed range-bound; Auto softened post-festive demand.

 

 

Global Markets:

• US: Dow -0.72%, Nasdaq +0.18%, S&P 500 -0.45%

• Europe: FTSE, CAC up

• Asia: Nikkei +3.61%, Hang Seng +3.62%

 

Overall: Markets remained range-bound with selective buying amid global caution and trade deal speculation.

 

 

Bond yields edged higher as tight banking system liquidity and optimism over a possible India–U.S. trade deal led to bond selling. Traders anticipated that tariff reductions under the trade pact could influence the RBI’s monetary easing path, potentially limiting future rate cuts.

 

 

Key Indicators:

 

• 10-year G-Sec (6.33% GS 2035): Yield rose 2 bps to 6.53% (prev. 6.51%).

 

Drivers of Yield Movement:

 

Global Factors: Rising U.S. Treasury yields amid strong U.S. macro data and hawkish Fed commentary weighed on sentiment.

 

Crude Oil Volatility: The surge in crude prices raised concerns of imported inflation, adding upward pressure on yields.

 

Rupee Weakness: The INR depreciation near ₹88.70/USD prompted cautious positioning by foreign investors.

 

Outlook: Yields are likely to remain range-bound in the near term as markets await RBI’s liquidity operations, clarity on the India–U.S. trade deal, and global inflation data. A sustained drop in crude oil prices or RBI’s open market operations (OMOs) could provide near-term relief to the bond market.

Economic Update

 

 

Overall: Industrial growth moderated, digital payments surged, gold reserves stayed firm, while FDI and rupee came under pressure.

 

 

Best Regards
 

Alpha Research

 

Disclaimer:  The perspectives provided reflect our expectations of the economy, market, and investments, which may or may not materialize. Investors are encouraged to conduct their own due diligence before investing.