Markets open on a positive note as global cues turn favorable. Early monsoon, strong rural signals, and sector-specific developments keep investors hopeful.

Indian equity markets opened strong today, bolstered by a softer U.S. dollar, delayed tariff action from the U.S. on EU goods, and upbeat sentiment in Asian markets. Investors are also watching closely for India’s upcoming GDP data later this week, which could shape views on the country’s economic momentum.

Monsoon Arrives Early : Rural Stocks in Focus

The southwest monsoon has arrived earlier than usual, bringing a wave of optimism for rural demand. Agriculture still supports over half of India's population, and timely rainfall is key to the success of crops like rice, pulses, and sugarcane. However, experts caution that it’s not the early start but the distribution of rainfall that determines rural income and inflation trends. Stocks tied to rural consumption, such as FMCGs, fertilizers, and two-wheelers, may remain in focus.

Alcohol Firms Eye the Premium Wave

Indian spirits makers are raising their bets on premium segments, especially single malts. Radico Khaitan, known for its brand Rampur, has launched a new expression, Trikal, while Piccadily Agro is expanding into luxury vodka with Cashmir, blending organic wheat with water from the Kashmir Valley. Despite recent underperformance in liquor stocks, analysts believe premiumization could drive the next growth cycle, especially as urban discretionary demand holds strong.

ONGC: A Production Promise or a Persistent Lag?

ONGC’s recent results missed expectations, and investor confidence is being tested again. The PSU oil explorer has guided for a 6% rise in gas production over FY25–27, citing ramp-up in offshore fields and the Krishna-Godavari basin. However, Nuvama flagged that the company has missed guidance for seven consecutive years, and with crude prices softening, the upside looks limited. The stock has remained largely flat year-to-date.

Analyst Actions: Key Rating Changes

• Ramco Cements cut to Reduce by HDFC Securities, Price Target: ₹850

• PSP Projects downgraded to Sell by Avendus Spark, Price Target: ₹520

• HDFC Bank reduced to Add by ICICI Securities, Price Target: ₹2,150

Global Cues Boost Risk Appetite

In a key relief for global trade, former President Trump has postponed the implementation of a 50% tariff on EU goods to July 9, calming markets that had feared imminent disruption. Coupled with declining U.S. bond yields and a weakening dollar, Indian markets are seeing improved foreign investor sentiment.

Bond Yields Fall, Equities May Re-rate

India’s 10-year government bond yield has dropped to a three-year low, narrowing the gap with dividend yields from equity benchmarks like the Nifty. Lower bond yields reduce borrowing costs for corporates and make equities more attractive relative to fixed income, according to economists at Anand Rathi. They believe this yield compression could set the stage for a re-rating of Indian stocks over the coming quarters.