1. Market Sentiment and Opening Trend
The Indian stock market began the trading session on July 3, 2025, on a positive note, driven by favorable global cues and investor optimism around a possible trade agreement between India and the United States. Global markets were buoyed by news of a U.S.–Vietnam trade deal, which ignited hopes of similar bilateral agreements, particularly between the U.S. and India.
In response, the benchmark indices opened with modest gains. The Nifty 50 advanced by 0.4 percent to touch 25,555, while the BSE Sensex rose by 0.41 percent to 83,752 during the early morning session. Market breadth was positive, with more advancing stocks than declining ones.
Mid- and small-cap indices also witnessed buying interest, reflecting growing participation from retail and institutional investors in broader market segments.
2. Global Influences
The positive tone in domestic equities was largely influenced by upbeat sentiment in global markets. U.S. indices, particularly the S&P 500 and Nasdaq, ended the previous day with new record highs, fueled by gains in technology stocks such as Tesla, Apple, and Nvidia. Additionally, the announcement of a trade agreement between the United States and Vietnam lifted investor hopes for further international trade collaborations, especially involving India.
Asian markets, excluding Japan, traded in the green. Optimism surrounding regional trade and expectations of lower crude oil prices due to higher production forecasts supported Asian equities.
A weakening U.S. dollar and signs of easing global crude oil prices added further optimism for Indian investors. Lower crude prices are particularly favorable for India, which is a major oil importer. This environment creates positive momentum for equities, especially in oil-sensitive sectors such as paints, transport, and FMCG.
3. Sector Performance
On the sectoral front, the auto sector led the rally, gaining over 1 percent as improving global trade conditions and easing input costs boosted expectations for better margins and export potential. Automakers like Mahindra & Mahindra, Maruti Suzuki, and Tata Motors witnessed healthy buying throughout the session.
Information technology stocks also showed strength, gaining around 0.3 percent. The sector benefited from a weaker rupee and steady demand for digital transformation services from global clients.
Other sectors such as FMCG, metals, and oil & gas traded in positive territory. Paint companies like Asian Paints saw buying interest due to the favorable impact of falling crude oil prices on input costs.
Conversely, the public sector banking index declined by nearly 0.4 percent. Weak quarterly performance by select PSU banks and slower credit growth figures dampened sentiment in this pocket.
4. Key Stocks in Focus
Several stocks were in the spotlight due to corporate developments, earnings updates, and block deals.
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HDFC Bank and ICICI Bank both advanced, adding around 0.7 to 1 percent each. Their gains were supported by positive sentiment around financials and expectations of better-than-expected loan growth for the quarter.
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HDB Financial Services, which had debuted on the stock exchange the previous day with an impressive listing premium, continued its upward momentum. The stock surged over 4 percent intraday, trading close to ₹891. The sustained rally was attributed to strong institutional buying and a bullish outlook from brokerages, with some recommending a target of ₹900.
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Punjab National Bank (PNB) declined around 2.5 percent after reporting lower-than-expected loan growth figures, sparking concerns about asset quality and profitability. The decline in PSU banking stocks was largely led by PNB’s performance.
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Asian Paints gained nearly 1.8 percent and remained above its 200-day moving average. Investors reacted positively to the news of declining crude prices, which is expected to reduce the company’s raw material costs.
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Avenue Supermarts (DMart) experienced a sharp fall of 3.7 percent, as its quarterly update pointed to sluggish revenue growth and weaker-than-expected sales momentum.
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Nykaa dropped by over 4 percent intraday after a large block deal involving approximately six crore shares. The selling pressure was attributed to early investors, including the Banga family, offloading a stake at a discount of nearly 5.5 percent.
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Tata Power saw a marginal decline following an adverse arbitration ruling involving a payment dispute valued at nearly $490 million. Investors remained cautious about the financial implications of the decision.
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Motilal Oswal Financial Services saw its stock jump nearly 6 percent after announcing that its total assets under management (AUM) had crossed ₹1.5 trillion.
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NACL Industries hit the upper circuit of 5 percent. The stock has rallied over 350 percent in the last four months, driven by rising exports and strong domestic demand.
5. IPO Market and SME Listings
The Indian primary market continued its busy streak, with several developments in the IPO space.
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HDB Financial Services, which raised ₹12,500 crore in India’s largest IPO this year, remained in focus as the stock continued to trade above listing price. Its strong debut and sustained demand signaled healthy appetite for quality financial services stocks.
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The total IPO pipeline for July is estimated at over ₹20,000 crore. Major upcoming issues include those of Credila Financial Services, NSDL, Aditya Infotech, JSW Cement, and LG Electronics India. All of them are expected to file draft papers or launch offerings in the coming weeks.
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In the SME segment, Indogulf Cropsciences listed at ₹111 and closed nearly flat after debut. The IPO was oversubscribed, but post-listing enthusiasm remained muted. Meanwhile, SME IPOs from Cryogenic OGS and Crizac opened for subscription on July 3, with closing dates set for July 7.
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Meesho, a leading e-commerce platform, filed a confidential draft red herring prospectus (DRHP) with SEBI to raise ₹4,250 crore. The move is seen as a significant step in diversifying the Indian startup ecosystem’s public presence.
6. Regulatory Developments
A major regulatory update was the implementation of a single contract note system by SEBI. The reform allows investors to receive one consolidated contract note for trades executed on both BSE and NSE, starting June 27, 2025. This aims to simplify compliance, reduce paperwork, and make it easier for investors to track trades and costs.
Market participants welcomed the change as a step toward greater operational efficiency, especially for brokers and high-volume traders operating across exchanges.
7. Technical Analysis and Broker Outlook
From a technical perspective, both the Sensex and Nifty continue to hold key support zones and show signs of an ongoing bullish trend. According to analysts:
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Nifty is expected to remain in the range of 25,200 to 25,800 in the near term.
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A breakout above 25,800 could trigger a fresh rally toward the psychological mark of 26,000 and beyond.
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If Nifty falls below 25,200, it may indicate short-term weakness.
Brokerages are increasingly bullish on the Indian market’s prospects:
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Elara Securities expects Nifty to rise 8 to 10 percent in the next two months, driven by easing global crude prices and favorable macro conditions.
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Geojit Financial Services believes the market remains structurally strong, and short-term volatility should not deter long-term investors.
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A Bloomberg poll of market strategists indicates a year-end target of 26,500 for Nifty and 28,450 by the end of 2026.
However, analysts also caution that high valuations, especially in select mid- and small-cap stocks, may warrant a degree of caution.
8. Macroeconomic Data
The June reading of the HSBC India Services PMI stood at 60.4, down slightly from 58.8 in May but still well within expansion territory. A reading above 50 indicates economic expansion. The services sector continues to be a major driver of India’s economic growth, and the robust PMI print reflects ongoing demand strength.
Inflation trends, global interest rate signals, and monsoon progress will be closely monitored in the coming weeks as these factors play a critical role in shaping the Reserve Bank of India’s upcoming policy stance.
9. Mutual Funds and Retail Investment Trends
The mutual fund industry saw a notable uptick in inflows in gold ETFs, with ₹291 crore coming in during May. SIP (Systematic Investment Plan) returns across equity funds remain strong, with many funds delivering XIRRs of over 20 percent over five years.
JioBlackRock Mutual Fund, a joint venture between Reliance Jio and BlackRock, announced the launch of three new debt mutual fund products on the MyJio platform. These include Overnight, Liquid, and Money Market Funds, targeted at conservative investors seeking liquidity and short-term yield.
10. Final Summary and Key Takeaways
The trading session on July 3, 2025, reflected a mix of optimism and cautious profit booking. Driven by favorable global developments and strength in frontline sectors like auto and banking, Indian equities continued their upward trajectory. However, pockets of underperformance in PSU banks and consumer retail highlighted the market’s selective nature.
Key highlights include:
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Positive momentum from global trade deals.
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Strength in financial and auto sectors.
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Weakness in PSU banks and retail.
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Strong IPO activity and high investor participation.
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SEBI’s regulatory reforms to streamline operations.
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Robust mutual fund and gold ETF flows.
Looking ahead, investors will focus on the progress of a potential India–U.S. trade agreement, the RBI’s monetary policy stance, Q1 corporate earnings, and global cues such as crude oil prices and dollar strength.
As the market enters the second half of the calendar year, the outlook remains constructive, although periodic volatility and profit-taking are expected to persist.
