DayStarter

Market snapshot

Equities and sectors

Indian equities closed higher on 6 July. The Nifty 50 ended at 24,430.35, up 0.66% from its previous close of 24,270.85. The Sensex ended at 78,285.07, up 0.67% from 77,763.91. Another reported Sensex close was 78,285.06.

The Nifty opened with a small 37-point gap up at 24,307. It crossed 24,430 around noon, moved between 24,430 and 24,450 until around 1:30 PM, then gave up some gains toward 24,380 after 1:30 PM. It recovered near the day’s highs around 3 PM and closed at 24,430.35.

The BSE benchmark rose for a fourth straight session, with a gain of 521.16 points on the day. Over four consecutive trading days, the Sensex added 1,806.4 points, or 2.36%, while the Nifty added 564.6 points, also 2.36%. HDFC Bank was the strongest stock in the Sensex pack, rising 3.59%.

Sectoral indices

Sector performance was positive in several domestic cyclical areas. Nifty Realty was the strongest sector, up 1.81%. Nifty Consumer Durables rose 1.48%, and Nifty Auto rose 1.36%. The laggards were Nifty Media, down 0.95%, Nifty PSU Bank, down 0.88%, and Nifty IT, down 0.59%.

F&O stocks

Among F&O stocks, the strongest gainers were DIXON, RADICO and MANAPPURAM. The weakest stocks were VBL, KOTAKBANK and MCX.

Commodities, currency and bond yields

On MCX, gold and silver moved down slightly. Gold was at 146,964, down 0.28%, while silver was at 237,116, down 0.12%. Crude oil edged up to 6,571, up 0.05%, and natural gas fell to 309.00, down 0.45%. Among base metals, zinc rose 1.10%, aluminium rose 0.76%, and copper rose 0.03%.

The reported currency values differed across sources. One value put USD/INR at 95.57, up 0.18% from 95.40. Another report put the rupee close at 95.43 per dollar, a 25-paise depreciation on the day, after opening at 95.25 and trading in a 95.22 to 95.48 range. Both reported values are stated here.

In bond markets, the US 10-year bond yield stood at 4.48, up 0.22%. The India 10-year bond yield was 6.68, down 0.43% from 6.71.

Institutional flows

Foreign institutional investors were net buyers of ₹1,355.0 crore on 3 July, while domestic institutional investors were net sellers of ₹1,954.0 crore. Over the five sessions to 3 July, FIIs were net sellers of ₹4,005.0 crore, while DIIs were net buyers of ₹12,632.0 crore. Another reported FII figure for Friday was ₹1,355.33 crore of equity buying.

The macro view

Capital expenditure classification

The Centre will widen the scope of capital expenditure from 2027-28, or FY28. The revised classification will include spending on rehabilitating, retrofitting and upgrading public assets. It will also add dedicated heads for digital and ICT equipment.

The classification will depend on cost and useful life. Digital items costing ₹1 lakh or less, or with a useful life of up to three years, will be treated as revenue expenditure. ICT equipment costing more than ₹1 lakh, or with a useful life of more than three years, must be classified as capital expenditure. Capital expenditure usually refers to spending that creates or improves long-term assets.

The Union Budget 2026-27 has earmarked a record ₹12.22 trillion for capital expenditure. This is equal to 3.1% of GDP and is around 11.5% higher than the revised estimate of ₹10.96 trillion for FY26.

Monsoon, inflation and water stress

A weak south-west monsoon could push India’s inflation to 5.1% in FY27, reduce rural demand, and put pressure on sectors such as agriculture, microfinance, tractors and two-wheelers. The broader economy and banking system were described as resilient. The IMD expects the 2026 south-west monsoon to be around 90% of the long-period average.

India recorded its fifth-lowest June rainfall since 1901. Reservoir storage fell from more than 38% of live capacity in late April to 26% in the week ending 2 July. June rainfall was nearly 40% below normal.

Groundwater pressure is also high. India extracted 247.2 billion cubic metres of groundwater, equal to 61% of its annual extractable resources. Farming accounted for nearly 87% of total extraction. Per-capita water availability fell from more than 5,000 cubic metres in 1951 to 1,486 cubic metres in 2021. This is below the 1,700-cubic-metre water-stress threshold.

Rupee outlook and short-term funding

A poll of eight economists found that most expect the rupee to stay in a 94 to 96 range against the US dollar in the near term, before gradually weakening by March 2027. The rupee depreciated 11% in FY26 and touched a record low of 96.82 on 20 May. India’s forex reserves fell by $61.6 billion during the conflict to $666.9 billion as of 26 June.

Commercial-paper issuance touched a near five-year high in June. Corporates raised ₹2.53 trillion, up 84.6% from ₹1.37 trillion in May and 59.4% higher than a year earlier. Commercial paper is a short-term borrowing instrument used by companies.

Mint; S&P Global Ratings; IMD; RBI; Prime Database

Corporate action and earnings

Domestic corporate developments spanned autos, banks, deals, capital raising, realty and health.

Autos and banks

Alternative-fuel vehicles: Alternative-fuel passenger vehicles reached a record share in June. EV, hybrid and CNG passenger vehicles accounted for 40.4% of total retail passenger-vehicle sales, up from around 38% in May. Overall passenger-vehicle sales rose 28.6% year-on-year to a record 4.11 lakh units. Another reported figure put June passenger-vehicle retail sales at 4,10,853 units, up 28.63% year-on-year, and total auto retail sales at 2,557,234 units, up 21.83% year-on-year.

• HDFC Bank: HDFC Bank shares rose over 3% after the lender reported a 15.4% year-on-year rise in gross advances and a 14.7% rise in period-end deposits for the June quarter.

Deals and capital

• Adani Group: Adani Group lined up nearly $10 billion in fresh capital and strategic commitments within a week. This included $3.2 billion from equity through a QIP and stake sale, and a $6.6 billion commitment from strategic partners. Adani Enterprises launched a ₹15,000 crore, or $1.6 billion, QIP on 2 July. Adani Energy Solutions plans a ₹10,000 crore, or $1.1 billion, QIP. Apsez will sell a 49% stake in its Vizhinjam port to an MSC unit for $539 million. The group’s gross debt was $39.1 billion across 10 listed companies as of 31 March 2026.
• TPG, GIC and ICICI Bank: TPG, GIC and ICICI Bank acquired a 100% stake in Aseem Infrastructure Finance in a deal valued at about ₹5,000 crore. TPG will hold 65%, GIC 25%, ICICI Bank 5%, and 5% will go to ESOPs.
• Novartis and Manipal Health: Novartis agreed to acquire British biotech Myricx Bio for up to $1.5 billion. The amount includes $1.1 billion upfront and up to $400 million in milestone payments. Manipal Health received Sebi’s approval for a $1.1 billion IPO and plans to raise up to ₹8,000 crore in primary capital.

Realty, health and other

• Oberoi Realty: Oberoi Realty recorded gross bookings of ₹8,109 crore from Three Sixty North, its first Delhi-NCR project in Gurugram. The company sold 13.52 lakh sq ft of RERA carpet area, with apartments priced from ₹18 crore.
• Ola Electric: Two Ola Electric suppliers, Sterling E-Mobility and Anevolve Mando, moved the NCLT over unpaid dues of more than ₹40 crore. The dues were ₹29.8 crore and ₹10.8 crore respectively, pending for more than 45 days. Ola Electric’s FY26 revenue fell 50% year-on-year to ₹2,253 crore.
• Office leasing: Office leasing reached a record 45.5 million sq ft of gross leasing in H1 2026, up from 41.5 million sq ft a year earlier. GCCs took a record 19.6 million sq ft, equal to 43% of the total.

Upcoming events

The following economic releases were scheduled. These are scheduled releases, not confirmed outcomes.

Earnings calendar

Ex-date and dividend details are not reproduced in this brief. For ex-dates and dividends, refer to NSE India or BSE India.

Mint; Zerodha

Global pulse

Global markets

International headlines

• Crude oil: Crude oil traded below $69 per barrel, near its lowest level since late February. Shipping through the Strait of Hormuz normalised, and supply concerns eased. OPEC+ approved a production-quota increase of 188,000 barrels per day for next month.
• Foxconn: Foxconn reported a 39.8% year-on-year rise in second-quarter revenue to T$2.51 trillion. Demand for AI servers and cloud infrastructure drove the increase.
• Europe and UK: Germany’s DAX climbed to a record high of 25,860 on Monday. UK new car sales rose 11.4% year-on-year to 213,166 units in June, the strongest June since 2019. Battery electric vehicles captured a record 30% market share.
• Solstice Advanced Materials: Solstice Advanced Materials agreed to acquire Element Solutions in a cash-and-stock deal valued at about $14.5 billion, including debt.
• AI and jobs: On the AI-jobs debate, an EY-Parthenon survey found that the share of CEOs expecting AI-led significant head-count reductions fell from about 46% in January 2025 to 20% in May. Amazon began laying off 8,000 workers in May.

Zerodha; Mint; The Wall Street Journal

Management chatter

Verbatim comments from named leaders and policymakers.

Zerodha, Management Chatter; Mint, Quote of the Day

Feature: The yen carry trade

The Bank of Japan has raised its policy rate to 1.0%, while the yen has stayed near 160 per dollar. Benzinga reported that the yen carry trade is “gaining momentum again.” This feature explains what the trade is, why the yen has been central to it, and where the setup stood in 2026.

What the carry trade is

A carry trade involves borrowing money in a currency with low interest rates and investing the money in assets linked to a currency with higher interest rates. The investor tries to earn the difference between the low borrowing cost and the higher return on the asset, while also hoping that exchange-rate movements do not erase the gain.

In the yen carry trade, investors borrow yen at very low interest rates, convert the yen into a foreign currency, and invest in higher-yield assets. The profit is the higher foreign yield minus the low Japanese borrowing rate, after adjusting for any yen appreciation. Yen appreciation matters because a stronger yen makes it more expensive to repay yen-denominated borrowing.

Why the yen became a funding currency

The Japanese yen has often been used in carry trades because Japan kept interest rates extremely low for a long period. Investors could borrow yen at low rates and use the money to buy higher-yielding currencies such as US dollars, Mexican pesos or New Zealand dollars. The gap between US and Japanese interest rates allowed investors to potentially earn annual returns of 5% to 6% on dollar-yen carry trades.

The built-in risk

The trade works best when currencies are stable or when the asset currency rises against the yen. It can reverse quickly if the yen strengthens unexpectedly. A stronger yen raises the cost of repaying yen loans, which can wipe out profits and force investors to close positions quickly.

A yen short squeeze happens when investors who borrowed or sold yen are suddenly forced to buy yen back. That buying pushes the yen higher, which can force more investors to unwind their positions too.

A short history

• 1990s origins: Japanese interest rates were low during the second half of the 1990s, which led to some yen carry-trade activity. That activity broke down during the ruble crisis of 1998, as hedge funds unwound positions after volatility increased.
• Zero-rate era: For much of recent financial history, the Bank of Japan kept interest rates at essentially zero, and sometimes negative, to stimulate growth and fight deflation. This made the yen a common funding currency.
• 2008 and after: The yen carry trade saw large unwinding episodes during the global financial crisis in 2008 and during Bank of Japan policy shifts in the late 2010s.
• August 2024 unwind: The Bank of Japan raised rates from near zero to 0.25%. Expected US rate cuts added to the pressure, and the yen appreciated 13% in a month. Japan’s Nikkei index saw its biggest daily fall in history on 5 August 2024, exceeding the fall on 1987’s Black Monday. The Nikkei 225 fell more than 12% in a single day, and the S&P 500 fell 3%.

Where things stand in 2026

The Bank of Japan raised its policy rate by 25 basis points to 1.0% in June 2026, after the rate had stayed at 0.75% since December 2025. This was described as a more-than-three-decade high. Board member Naoki Tamura said the Bank of Japan should keep raising the policy rate by 0.25 percentage points at intervals of a few months toward a neutral level of around 2%.

The yen still remained weak. Despite the Bank of Japan’s rate hikes and about 11.7 trillion yen, or $72.8 billion, of FX intervention from April to May, the yen stayed around 160 against the dollar. Nomura’s Naka Matsuzawa linked this to still-high US bond yields, which kept the carry trade attractive. The 10-year Japanese government bond yield was around 2.64%, compared with around 4.451% for the 10-year US Treasury.

Positioning also showed heavy bearish bets against the yen. Leveraged funds raised their bets against the yen to more than 115,000 contracts in the week ended 9 June, the largest bearish position since November 2017. JPMorgan’s view was that markets had largely priced in a possible Bank of Japan rate hike and FX intervention, limiting their impact compared with two years earlier.

Feature sourcing note: This feature aggregates reported facts from the World Economic Forum, including explainers citing Associated Press and Reuters; Economics Help, Tejvan Pettinger; a Federal Reserve Bank of San Francisco working paper; CNBC reporting from June 2026; TradingEconomics and newtrading.io on Bank of Japan rate history; MenthorQ; and Benzinga, citing CFTC and JPMorgan.

Day at a glance

Closing

Primary sources: Zerodha AfterMarket Report, 6 July 2026 close; Mint, Mumbai edition, 7 July 2026. This briefing aggregates publicly reported facts from the named sources and is not investment advice.