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Below the Quote on Daily Market Commentary for July 3rd 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equities are expected to maintain a gradual uptrend, supported by favourable global cues and easing concerns over the US interest rate outlook. The ongoing June-quarter business updates are likely to drive stock-specific action, while investors will closely monitor the southwest monsoon after June rainfall remained 40% below the Long Period Average. While the IMD forecast July rainfall at 94% of the Long Period Average, it revised its 2026 monsoon forecast to 90% of the Long Period Average due to El Niño conditions. Domestic markets extended their gains on Friday, with the Nifty 50 advancing 0.4% to close at 24,271, taking its weekly gain to 0.9%.  Sentiment was supported by weaker-than-expected US labour market data, reinforcing expectations of Federal Reserve will keep interest rates unchanged.  A rebound in Information Technology stocks and favourable global cues further supported the rally, although gains were pared in the latter half of the session amid profit booking in PSU Banks and Energy stocks. Broader markets were mixed, with the Nifty Midcap 100 declining 0.2%, while the Nifty Smallcap 100 ended flat. Sectorally, Realty, Information Technology, Healthcare and Pharmaceuticals outperformed. The Nifty IT index rebounded nearly 2%, extending its two-day gain to over 6% on value buying following the recent correction and improving global technology sentiment. India VIX declined 3.7%, reflecting easing market volatility. PSU Banks, Power Equipment, and Energy stocks were the key drags on the market. Power equipment stocks declined 6–10% after reports that the government had allowed four Chinese power equipment manufacturers to participate in tenders for critical power projects, raising concerns over heightened competitive intensity. Sectoral focus is expected to remain on Defence and Refining. Defence stocks are likely to remain in focus ahead of the Defence Acquisition Council meeting, where procurement proposals worth over ?1 lakh crore are expected to be considered. Refining companies may also attract attention following reports of higher refined fuel exports, highlighting India's growing role in global energy supply chains.

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