On Wednesday, July 23, 2025, the Indian equity markets delivered a remarkable performance. The Sensex surged by 539.83 points (+0.66%) to close at 82,726.64, while the Nifty50 jumped 159 points (+0.63%) to settle at 25,219.90. This strong upward movement reaffirmed investor confidence amid a complex mix of global and domestic developments.
This rally was primarily driven by positive global cues, especially the announcement of a significant U.S.–Japan trade pact. The deal sparked renewed investor optimism across Asian equity markets. Back home, market participants expressed confidence in domestic corporate earnings, economic growth resilience, and the possibility of improved trade agreements involving India.
Sector-wise performance:
- Bank Nifty led the charge, rising approximately 0.8% due to renewed investor interest in banking majors.
- Auto and financial stocks showed strong gains with Tata Motors, Shriram Finance, and Bharti Airtel among the top performers.
- Consumer and FMCG stocks witnessed mixed trends. While some like Maruti Suzuki rose by over 1%, ITC witnessed marginal declines, indicating cautious consumer sentiment.
- Public Sector Undertakings (PSUs) such as NTPC saw moderate gains but traded under lower volumes, indicating selective institutional buying.
Volume and breadth:
- Out of the 3,800 stocks traded on BSE, around 1,882 advanced, 1,989 declined, and 161 remained unchanged.
- The Indian rupee slipped slightly against the U.S. dollar, closing at ₹86.41, reflecting caution on the forex front.
Overall, the market breadth was fairly balanced, signaling cautious optimism. Traders noted that the rally, although broad-based, still had underlying themes of stock-specific movement driven by earnings expectations and macro data.
2. Driven by Global Cues
US–Japan Trade Deal
The centerpiece of the day’s positive momentum was a freshly announced trade agreement between the United States and Japan. The deal mitigated concerns over potential trade disputes in Asia and reinforced the belief that global cooperation could still find ground amid protectionist policies.
Global Market Momentum
- Asian Markets: Most major Asian indices, including Japan’s Nikkei and Hong Kong’s Hang Seng, closed in green. This set a strong tone for Indian equities during early trade.
- GIFT Nifty Futures: Suggested a positive start, aligning with the global rally.
- U.S. and European Markets: Overnight gains on Wall Street and a rebound in European indices further added to the optimism.
India–U.S. Trade Outlook
Although the India–U.S. interim trade deal remains under negotiation, expectations of an announcement by early August added speculative buying in export-driven sectors. Analysts anticipate that concessions in agriculture, manufacturing, and tech services could benefit key Indian corporates.
3. Institutional Flow Dynamics
Institutional flows continued to impact short-term direction:
- Foreign Institutional Investors (FIIs): Turned net sellers in early July. Their cautious stance was influenced by global interest rate uncertainties and trade headlines. However, day-specific inflows indicated selective repositioning in large-cap financials.
- Domestic Institutional Investors (DIIs): Provided strong buying support across sectors. DIIs have increasingly become stabilizing forces for Indian markets as retail SIP inflows continue to surge month-on-month.
The divergence between FII and DII behavior reflects a market in transition—where foreign investors weigh global risks, and domestic investors bank on long-term India growth.
4. Earnings in Focus
The earnings season continued to shape stock-specific moves. Several companies released strong Q1 FY26 results:
- One97 Communications (Paytm): Reported a surprise net profit of ₹122.5 crore, attributed to strong traction in digital lending and financial services. Revenue surged 27.7% YoY.
- IRFC: Posted a 10.7% YoY rise in net profit to ₹1,745.7 crore, driven by strong leasing activity.
- Dalmia Bharat: Registered 171% growth in net profit, but slightly missed Street expectations due to margin pressure in cement costs.
- Dixon Technologies: Showed a stellar 68.3% profit rise, with revenue growing over 95%, signaling continued strength in India’s electronics manufacturing sector.
- ONGC: Approved a ₹5,082 crore investment in the Mozambique LNG project, signaling long-term energy diversification.
Upcoming reports from IT giants Infosys and Coforge, pharma major Dr. Reddy’s, and consumer-facing Tata Consumer are expected to drive short-term index movements.
5. Technical Analysis & Chart Patterns
Nifty50 Technicals
- The Nifty closed above its 20-day Exponential Moving Average (EMA), indicating a continuation of bullish momentum.
- Key support levels: 25,006 to 25,035
- Key resistance levels: 25,152 to 25,300
Technical indicators show:
- RSI (Relative Strength Index): Hovering around 46.65, in neutral territory but ready to swing.
- MACD (Moving Average Convergence Divergence): Currently bullish.
- Stochastic and CCI: Signal caution and suggest consolidation unless a breakout occurs with strong volumes.
Bank Nifty Technicals
- The index ranged between 56,100 and 57,200, signaling a potential breakout zone.
- Analysts expect momentum to pick up if it crosses the 57,500 mark with volume.
- Indicators show strength supported by institutional inflows into major private and PSU banks.
6. Macro & Sentiment Drivers
Beyond charts and flows, sentiment continues to be influenced by broader macro indicators:
- Earnings Growth Deceleration: While still healthy, Nifty50’s aggregate earnings growth has cooled from a 24% CAGR to mid-high single digits.
- Valuations Elevated: At ~21-22x FY26 forward P/E, Indian equities are trading near historical valuation highs.
- Trade and Policy: The progress (or lack) in global trade discussions will remain a key risk/reward driver.
- Crude Oil and Currency: Rising global oil prices and a weakening rupee could impact inflation-sensitive sectors.
- Government Policy: Market participants are also eyeing any pre-budget policy guidance or fiscal steps from the Indian government.
7. What to Expect Tomorrow (July 24, 2025)
Pre-Market Signals
- Global cues remain favorable.
- GIFT Nifty suggests a gap-up or flat open depending on overnight U.S. earnings.
Key Catalysts for Thursday
- Q1 Earnings Announcements from Infosys, Tata Consumer, and Dr. Reddy’s.
- Updates on India-U.S. trade negotiations ahead of August.
- Sectoral performance driven by stock-specific news and upgrades.
- Commodities and Currency fluctuations to impact metal, oil & gas, and auto sectors.
If earnings surprises remain positive, Nifty could attempt to test new short-term highs.
8. Investment Strategy
Conservative Traders
- Wait for Nifty to break past 25,300 with strong volume.
- Maintain stop-loss near 25,000 for new positions.
- Focus on risk-adjusted entries with tight position sizing.
Aggressive and Long-Term Investors
- Accumulate quality stocks on dips, particularly in banking, auto, and IT sectors.
- Use sector rotation strategies based on macro and technical triggers.
- Monitor quarterly earnings, global economic data, and central bank commentary.
9. In Focus: State Bank of India (SBI)
SBI continued its upward journey, closing at ₹820.75, marking a 0.71% gain. Trading volumes surged, significantly surpassing the 50-day average. The stock now trades roughly 7.7% below its 52-week high, with strong institutional accumulation visible on charts.
SBI’s consistent credit growth, improving asset quality, and digital transformation initiatives make it a favorite among institutional investors. Technicals suggest potential for breakout above ₹830, with intermediate support at ₹790.
Company website: www.sbi.co.in
10. Conclusion
The Indian markets rallied strongly on July 23, 2025, driven by global trade optimism, robust Q1 earnings, and bullish technical setups. While global sentiment provided the fuel, domestic resilience added the momentum.
As we approach the next trading session, investors must balance optimism with caution. Earnings surprises, institutional flows, and macro policy actions will be pivotal. A breakout above 25,300 on the Nifty could usher in a new leg of the rally, while a drop below 25,000 might invite profit booking.
Bottom line: Indian stock market analysis points to a cautiously bullish outlook. Investors should stay nimble, monitor global and domestic cues closely, and position based on both fundamentals and technical signals.
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