Indian Markets Defy Regulation Blues, Close Flat Ahead of Crucial Triggers

Guwahati: Indian equity markets closed mostly flat today as investors consolidated their positions amidst a combination of homegrown regulatory announcements and international economic updates. The Nifty 50 closed at 25,415.45, rising a small 0.04%, while the BSE Sensex closed at 83,274.26, up 0.05 percent  both indices recording little change following a strong 15 percent advance in the last four months. 

Markets were mostly unaffected by SEBI's temporary prohibition on U.S.–based quant trading firm Jane Street, which allegedly made Rs 36,502 crore (~$4.28 billion) in January 2023 to March 2025 by manipulating derivatives. Analysts characterized the move as selective instead of systemic, indicating minimal effect on overall foreign portfolio investor (FPI) flows.

Volatility continued to be low, with the India VIX falling to 12.38, well beneath the 13 benchmark that usually indicates higher nervousness.
Technical experts pointed out that the Nifty is now range-bound between 25,400–25,450 with limited momentum until the July 9 U.S.–India tariff deadline.
Auto sector stocks topped the day's sectoral rallies, with a ~1.1 percent rise on hopes of easing trade barriers. Financial sector participants were robust; Bajaj Finance gained 3.1 percent on pre-quarterly asset expansion news, while Marico gained 3.6 percent on favorable rural demand data. Conversely, declines were recorded among discretionary stocks: Trent fell more than 7 percent after demonstrating sequential revenue fatigue and poor investor sentiment.

HDB Financial Services maintained its upbeat debut, ending 4 percent higher at Rs 847, after a 12.8 percent premium since its IPO listing earlier this week. Market breadth was underpinned by mid- and small-cap stocks, which collectively advanced about 0.5 percent, although stocks such as VST Industries trimmed earlier advances ending with a 5.35% fall after nine consecutive days of gains.
The rupee opened weaker, trading at approximately Rs 85.46–85.50/USD after firm U.S. job numbers raised concerns over delayed Federal Reserve rate cuts. Meanwhile, India’s forex reserves surged past $700 billion, and forward dollar book exposure narrowed to $65.2 billion from $88.7 billion, improving RBI’s liquidity management flexibility.

Expecting a Rs 160 billion central government bond auction (15-yr and 40-yr), and pre-U.S. Treasury news, the benchmark 10-year Indian government bond yield lifted slightly to ~6.30 percent. At the same time, the RBI sold a ₹1 trillion seven-day variable-rate reverse repo to mop up an all-time high Rs 3.75 trillion surplus liquidity, thus anchoring interbank rates in direction of the 5.50 percent policy corridor ceiling. On the capital side, FIIs purchased  Rs 1,232 crore worth of equities on July 3, while DIIs sold Rs 418 crore, indicating a wary but interest-led market stance. July is becoming a critical month for India's IPO calendar, with more than $2.4 billion worth of offerings lined up, led by Credila, NSDL, Aditya Infotech, and JSW Cement balanced against the upcoming Rs 1.86 billion worth of IPO lock-in expiry of previous listings .

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Global markets are cautious in anticipation of U.S. non-farm payrolls and Treasury auctions: Brent crude hovered around $68.5/barrel, with gold prices flattening, trading at ~$3,338/oz (INR 9,220/gm), subdued by optimism for high interest rates.

With the July 9 deadline for the India–U.S. trade agreement, range-bound action is expected from analysts unless some breakthrough news arrives. Mid-term momentum should focus on auto, financial and consumer stocks, while midcaps and some PSUs provide medium-term value. Market analysis by Dr. V.K. Vijayakumar of Geojit has outlined structural strength in domestic portfolios backed by FII inflows as well as consistent DII interest.