Market Wrap

Indian equity markets extended their recovery for the fourth consecutive trading session on 31 July 2025, with the Nifty50 rising 0.28% to close at 24,317. Despite intermittent profit booking during the session, buying interest remained resilient, enabling the benchmark to finish near the day's high and reflecting improving investor confidence. Bank Nifty underperformed during the early part of the session but recovered alongside the broader market as sentiment strengthened.

The automobile sector emerged as the day's biggest winner, with the Nifty Auto Index advancing more than 1.5% amid broad-based buying and encouraging first-quarter earnings. The strong performance reinforced optimism that the sector could continue to outperform if earnings momentum remains intact. Meanwhile, investors remained selective across other sectors as they balanced strong domestic earnings against a cautious global backdrop.

Global markets presented mixed cues. Asian equities traded lower after a weak overnight session on Wall Street, while European markets rebounded on renewed buying interest. The U.S. Federal Reserve kept interest rates unchanged as expected but reiterated that future policy decisions would remain dependent on incoming economic data. At the same time, rising crude oil prices and persistent trade-related uncertainties continued to keep global investors cautious, particularly toward emerging markets.

What's Ahead

Investor attention will remain firmly on the ongoing first-quarter earnings season, with several major banking, automobile, and industrial companies scheduled to announce their results. Strong corporate earnings could provide further support to the market's ongoing recovery, while any disappointments may trigger stock-specific volatility.

Apart from earnings, market participants will closely monitor foreign institutional investor (FII) flows, crude oil prices, and key U.S. macroeconomic data, including inflation and employment figures, for direction. Sustained foreign inflows and better-than-expected earnings could help extend the market's upward momentum, while adverse global developments or higher commodity prices may keep volatility elevated in the sessions ahead.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The Nifty 50 extended its recovery for the fifth consecutive session, closing at 24,317.15, as sustained buying interest helped the index overcome the crucial 24,250 resistance zone and settle near the day's high. The formation of another bullish candlestick, coupled with an improving RSI of 57.66, suggests strengthening upside momentum. Derivatives data also remains supportive, with a PCR of 1.14 indicating a balanced-to-positive market setup, while India VIX at 12.15 reflects only a marginal rise in volatility. As long as the index holds above the 24,150–24,200 support zone, the recovery is likely to continue towards 24,450–24,500. A decisive breakout above 24,500 could accelerate bullish momentum, while a breach below support may trigger short-term profit booking. Overall, the near-term outlook remains Sideways to Bullish, with a buy-on-dips strategy continuing to be favourable.

BankNifty

Bank Nifty ended marginally lower at 57,147.50 after a volatile session, but the index displayed resilience by attracting strong buying interest near the 56,800 zone and recovering most of its intraday losses. The formation of a pin bar-like candlestick near the 50-day EMA indicates that buyers remain active at lower levels, although the index still requires a sustained move above the 57,400–57,500 resistance zone to confirm stronger bullish momentum. As long as 56,500–56,700 remains intact, the broader structure continues to favour the bulls despite ongoing consolidation. The technical setup suggests a Sideways to Bullish outlook, with a breakout above resistance potentially paving the way for the next leg of the recovery, while a move below support could lead to renewed selling pressure.

Sensex

The Sensex closed at 77,928.15, gaining 0.35%, after recovering strongly from early weakness and finishing near the day's high, reflecting sustained buying interest at lower levels. Technically, the index continues to trade above its 20-day, 50-day, and 100-day EMAs, indicating that the near- to medium-term trend remains positive, although trading below the 200-day EMA suggests that the broader long-term trend is yet to turn decisively bullish. The RSI has improved to 57.58, signalling strengthening momentum, while the index continues to consolidate within a defined range. The 77,400–77,500 zone is expected to provide immediate support, whereas 78,300–78,600 remains a key resistance area. A sustained breakout above this range could trigger fresh buying momentum, while failure to surpass it may keep the index range-bound. Overall, the technical outlook remains Sideways to Bullish with a positive bias as long as key support levels hold.