After five straight weeks in the red, the mood in Indian markets is not any better this morning. Early cues from Nifty futures suggest a muted start, as weak US economic data and tariff worries weigh on global sentiment. Back home, investors will be monitoring earnings from real estate major DLF and consumer goods major Marico.
Technical warning signs spread across indexes
July’s seasonally unexpected 2.9 per cent drop in the NSE Nifty 50 Index may be an early sign of deeper weakness. According to Elara Capital, more than a fourth of the stocks in the benchmark have formed bearish monthly candlestick patterns. The last time this threshold was breached in October 2024, the Nifty slid 10 per cent over the next four months. The warning sign is even more pronounced in the broader market, with a third of NSE Nifty Smallcap 250 Index members flashing bearish patterns.
India remains a long-term draw for foreigners
Still, for longer-term investors, India remains appealing. Its resilient fundamentals stand out in Asia, a point JM Financial says will likely support foreign interest. While a potential unwinding of the yen carry trade could hurt flows, the impact is expected to be gradual as Japan’s interest-rate hikes will be measured. Foreign funds have pulled around $11 billion from local shares this year, but improving earnings prospects in the rest of 2025 could draw some of that capital back.
Broker body pushes for more stocks in F&O list
Meanwhile, local brokerages are seeking ways to keep market buoyant. The Association of National Exchanges Members of India or ANMI is pushing for expanding the list of stocks eligible for derivatives trading, arguing that more single-stock options could lift cash market volumes by 80 per cent to 120 per cent. While some critics warn that these derivatives are more prone to manipulation — especially among retail traders — the bulk of derivatives activity still centers on index options, seen as a safer bet in volatile markets.
And finally..
The push to expand the list of derivatives-eligible stocks comes when India’s options market is losing steam. In July, the average daily premium turnover on the NSE fell 11 per cent to ₹43,600 crore — the lowest level in over 18 months. The absence of Jane Street from the local market and the collapse in market volatility are to blame. Traders are now betting that a clearer picture from the earnings season could help revive interest in August.
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Published on August 4, 2025