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Below the Quote on Daily Market Commentary for July 2nd 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equity markets are likely to witness a gradual upmove on the back of positive global cues. Central banks in both India and the US remain focused on containing inflation, supporting overall market sentiment. Further, pre-quarterly business updates are likely to drive stock-specific action. Equities ended higher on Thursday, with the Nifty 50 gaining 0.5% to close at 24,175. Broader markets also advanced, with the Nifty Midcap 100 and Nifty Smallcap 100 gaining 0.5% and 1.3%, respectively, while the India VIX declined more than 7% to 12.29. The Nifty IT index gained 4.6%, rebounding after four consecutive sessions of decline, supported by easing US inflation concerns and short covering in the domestic market. However, we expect demand commentary to stay soft in 1QFY27, as macro, AI and geopolitical overhangs continue to weigh on discretionary spending and decision-making cycles. Domestic indicators remained strong, with passenger vehicle sales rising 24% year-on-year in June, power consumption increasing 11.6%, and UPI transaction volumes and values growing 23% and 20%, respectively, pointing to sustained economic momentum. Supporting the positive backdrop, June GST collections rose 13.9% year-on-year to ?1.95 lakh crore, driven by strong import tax collections. Investor sentiment was also aided by Japan's announcement of over US$10 billion in fresh investments across key sectors during the India-Japan Annual Summit. Meanwhile, Indian government bonds strengthened, with the benchmark 10-year yield easing to around 6.7% amid expectations of India's inclusion in the Bloomberg Global Aggregate Bond Index. Foreign investors infused nearly US$5.3 billion into the Indian bond market during June reflecting renewed confidence in India's fixed-income market

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