Nifty recovered 2.59% and foreign flows returned, while the rupee posted its best week since March. But oil remains near $90 and Bloomberg's weekend bond-index deferral has created a new test for yields, currency and financial stocks before the RBI decision.
The 2-minute read
Indian equities reversed the previous week's damage. Nifty rose on four of five sessions and gained 2.59%, while Sensex added 2.68%. The recovery was supported by returning foreign flows, strong domestic liquidity, lower oil than the prior Friday and an outsized rebound in technology shares.
July also finished constructively: Nifty gained 2.2%, Sensex 2.1%, and the Nifty IT index surged 16.8% - its strongest monthly performance in six years. Foreign investors bought roughly $1.6 billion of Indian equities in July after selling $29.3 billion in the first half of 2026.
Five sessions: from oil relief to flow-backed recovery
| Session | Nifty close | Move | Main driver |
|---|---|---|---|
| Mon 27 Jul | 23,995.95 | +0.96% | Oil collapsed; rupee and broad risk appetite recovered |
| Tue 28 Jul | 23,985.35 | -0.04% | IT strength offset HUL and Coal India weakness |
| Wed 29 Jul | 24,250.20 | +1.10% | Foreign buying and an IT-led broad rebound |
| Thu 30 Jul | 24,317.15 | +0.28% | Autos led while midcaps and smallcaps lagged |
| Fri 31 Jul | 24,383.60 | +0.27% | Bajaj Finance and M&M lifted a third straight gain |
From the previous Friday's 23,767.45 close, Nifty added 616.15 points. Sensex rose 2,034.87 points from 76,059.77. This was a recovery week, not a full risk reset: Brent remained above $90 and India's 10-year yield ended at 6.8343%.
Participation and institutional flows
FIIs bought on four of five sessions and DIIs bought on four of five sessions. The strongest foreign impulse came on 30 July (+₹3,623.51 crore), while DIIs were net sellers that day but returned to net buying on Friday.
For July, 11 of 16 major sectors rose. IT gained 16.8%, smallcaps 2.5% and midcaps 1.8%. HCLTech gained 25.7% for the month; Infosys, TCS and Tech Mahindra rose between 12.9% and 17.6%. This rotation helped India attract foreign money even as global AI-linked trades remained volatile.
India macro and policy dashboard
RBI policy on 5 August
The consensus expectation is a hold at 5.25%. The complication is the two-way macro signal: oil is below last week's extreme but remains elevated, June inflation is above comfort, and the rupee has improved after intervention and large foreign-currency inflows.
$40.81 billion capital-flow response
Measures announced in June generated $40.81 billion of inflows, including FCNR deposits, external commercial borrowing swaps and overseas foreign-currency borrowing. This strengthens the RBI's capacity to smooth currency volatility, but does not eliminate the oil and bond-flow risks.
Power mix milestone
Renewables supplied a record 20% of India's July electricity, producing 36.25 billion kWh, up 30% year-on-year. Coal's share fell to 65.7% from 69% in June, although coal generation still rose 12.8% year-on-year because total demand increased and hydropower weakened.
Oil, currency and precious metals
| Asset | 31 July close | Weekly change | Monthly context |
|---|---|---|---|
| Brent crude | $90.12 | -6.88% | +24% |
| WTI crude | $84.67 | -5.20% | +21% |
| USD/INR | 95.38 | rupee +1.0% | rupee -0.7% |
| Spot gold | $4,049.83 | approximately flat | +1.1% |
| Spot silver | $57.76 | about -0.6% | volatile |
Oil fell from the prior Friday's $96.78 Brent close, but the monthly move remains the warning: Brent gained 24% and WTI 21% in July. Shipping threats around Hormuz and Bab el-Mandeb, low U.S. inventories and refinery disruption keep the risk premium alive.
The rupee's 1% weekly gain was its strongest since March. RBI support, lower oil and a softer dollar helped, but the weekend bond-index decision can test that improvement. Gold ended near $4,050 after its first monthly gain in five months; silver finished at $57.76.
Corporate and finance week
Bajaj Finance
Quarterly profit rose 28% and net interest income 23%. The stock gained 8.3% on Friday as asset-quality signals improved.
Mahindra & Mahindra
Quarterly profit rose 6.8%. The company plans to double automotive production capacity over five years; farm revenue rose 19%.
Maruti Suzuki
Quarterly profit beat expectations. Domestic sales rose 41.2% and total volume increased 29.3% to a record 682,724 vehicles.
Amazon
Shares jumped about 15% after the strongest quarterly revenue growth in more than four years, led by accelerating cloud demand.
Microsoft
Shares rose about 3% on Friday after a 15% surge Thursday, reinforcing optimism around Azure and AI demand.
Apple
Shares fell 7.4% as supply constraints and forward guidance outweighed the quarterly earnings beat.
Global market close
| Index / rate | Friday close | Weekly signal |
|---|---|---|
| S&P 500 | 7,489.72 | +1.05% |
| Nasdaq Composite | 25,373.85 | +1.59% |
| Dow Jones | 52,485.03 | positive week |
| U.S. 10-year yield | 4.743% | valuation pressure |
| U.S. 30-year yield | 5.274% | 19-year high area |
Amazon's surge and Microsoft's AI/cloud strength helped Wall Street finish the week higher, but Apple fell sharply and long Treasury yields remained elevated. The result is a split global signal: earnings support equities, while rates continue to challenge valuations.
Weekend developments that can reprice Monday
1. Bloomberg bond-index inclusion deferred
Bloomberg postponed India's inclusion in the Global Aggregate Index, saying recent market reforms need more time to become established in practice. Foreigners had bought $6.8 billion of eligible government bonds before flows partially reversed. The 10-year yield ended Friday at 6.8343%; some market participants see a test of 6.90% if selling accelerates.
2. Indian Oil increases spot sourcing
Indian Oil said its spot crude share jumped from around 50% to almost 84% as Middle East disruptions forced greater flexibility. The company has increased purchases from Russia, West Africa and Latin America. IOC and Chennai Petroleum together control roughly one-third of India's 5.2 million barrels-per-day refining capacity.
3. Record renewable output
July's renewable generation reached a record 36.25 billion kWh, providing 20% of the power mix. The structural gain is positive for energy security, but weaker hydro and high night-time demand still lifted coal generation.
Week ahead: levels, catalysts and scenarios
Key reference zones
24,450-24,500 resistance24,300-24,380 pivot24,150-24,200 first support24,000 psychological support23,800-23,850 deeper support
| Scenario | What would support it | Likely market character |
|---|---|---|
| Relief / breakout | Brent below $90, bond sell-off contained, RBI hold with balanced guidance, FII buying persists | Test of 24,450-24,500; broader participation improves |
| Base case | Oil remains $88-$92, 10Y stays below 6.90%, RBI holds, earnings remain mixed | Consolidation around 24,200-24,450 with stock selection |
| Risk case | Bond yields jump, rupee weakens, oil-route threat worsens or global yields rise | 24,150 breaks; 24,000 and 23,800-23,850 become relevant |
What to watch
RBI policy - 5 AugU.S. payrolls - 7 AugIndia PMIsBrent / shipping routesIndia 10Y near 6.90%FII follow-throughQ1 earnings
Sources & methodology
Primary preference: official Indian releases and Reuters for time-sensitive market, policy, corporate and geopolitical facts. GIFT Nifty is identified as an August futures reference and is not equated with a cash opening. FII/DII figures are provisional cash-market activity and exclude derivatives.
- Reuters - India market close, July performance and foreign inflows
- Reuters - oil settlements and July performance
- Reuters - rupee weekly and monthly performance
- Reuters - gold and silver close
- Reuters - Bloomberg index deferral and India 10Y
- Reuters - foreign bond flows
- Reuters - RBI capital-flow measures
- Reuters - July renewable generation
- Reuters - IOC spot crude sourcing
- Reuters - global week-ahead catalysts
- GIFT Nifty historical futures - 31 July
- Provisional FII/DII daily cash activity
- PIB - June 2026 CPI
- PIB - June 2026 WPI
- PIB - June 2026 core industries