Markets Commentary: Sharp Rebound on July 21, 2025

Mumbai, July 21, 2025: Indian benchmark indices staged a sharp rebound on Monday, snapping a two-day losing streak, as frontline indices recovered from a weak opening. The Sensex surged over 400 points, while the Nifty reclaimed the psychological 25,000 mark, buoyed by strong buying interest in banking majors like ICICI Bank and HDFC Bank.

Nifty opened on a subdued note, hitting an intraday low of 24,882 in the early trades. However, the index witnessed a steady recovery through the session, eventually closing near the day’s high at 25,090.70, up 122 points or 0.49%. On the sectoral front, outperformance was seen in auto, capital goods, private banking, power, realty, and metal stocks — each gaining between 0.5% and 1.3%. Meanwhile, IT, PSU banks, oil & gas, and FMCG sectors saw mild profit booking, ending lower by 0.4%–1%. In the broader market, Nifty Midcap outperformed with gains of 0.6%, whereas the Nifty Small cap index ended largely unchanged, reflecting a mixed undertone in the broader space.

Nifty Outlook

On the daily chart, Nifty formed a bullish candlestick with a long lower shadow, reflecting strong buying interest at lower levels near the 24,900-support zone. Monday’s session saw demand picking up around this key support area. Index to extend the pullback and head towards the 25,200–25,250 zone in the coming sessions — a region marked by the confluence of the 20-day EMA and the previous week's high. However, a decisive breakout above 25,250 would be required to signal a potential end to the recent corrective phase and could unlock further upside towards the 25,500–25,600 levels in the near term. On the downside, a breakdown below 24,900 would indicate continued weakness and may lead to an extended correction towards the 24,600 mark. 

Bank Nifty Outlook

Bank Nifty formed a strong bullish candle on the daily chart, marked by a higher high and higher low, indicating renewed buying interest following the recent two-session pullback — primarily driven by strength in large-cap private sector banks. The index also managed to close above the 20-day EMA, re-entering the zone of its recent consolidation range. Going forward, the index is poised to extend its upward move towards the 57,250 level, which coincides with the trendline resistance drawn from recent swing highs. A decisive breakout above this level would open the door for a further rally towards the 58,000 mark. On the downside, immediate support is seen in the 56,000–55,700 zone — a crucial area marked by the confluence of the 50-day EMA and key Fibonacci retracement levels from the prior uptrend.

Derivatives

On the derivatives front, the advance-decline ratio favored advancing stocks, reflecting broader market optimism. Notably, a significant rise in open interest was observed in IEX, Reliance Industries, AU Small Finance Bank, UltraTech Cement, and Union Bank of India, pointing to heightened activity and investor anticipation in these counters.

Attributed to Bajaj Brokerage and Ashika Group