Market & regulatory update for July 19, 2025:

Market Overview & Institutional Flows
Domestic vs. Foreign Flows
FIIs remain cautious—showing muted net buying in July—while DIIs continue to prop up equity markets. Sunil Subramaniam highlights that India’s rally is now driven by strong domestic inflows, particularly in mid & small caps

FII/DII Activity (July 18)

FIIs: Net purchase of ₹374.7 cr

DIIs: Net purchase of ₹2,103.5 cr

Over the last five days, FIIs have sold ₹10,169 cr while DIIs have countered with ~₹11,000 cr in buying

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Macroeconomic & Policy Signals

Inflation & Policy Outlook
Retail inflation is expected to hit record lows in July, well beneath RBI’s forecasts—prompting calls for additional rate cuts later this year

Sector Snapshots

1. Pharma
Relief rally triggered after a delay in the proposed 200% U.S. pharma tariffs, boosting investor optimism across the sector

2. Auto & Auto Components
With cooling inflation and steady domestic momentum, the auto ancillary space continues to hold positive sentiment—even though global funding flows remain under pressure.

3. Capital Markets & Retail
Market breadth remains strong: Advance/Decline ratio at 1966/962, reflecting steady sector-wide participation

4. Technology & IT Services
Large-cap IT remains pressured post-earnings season, while market breadth indicates pockets of resilience in select mid-caps.

5. Banking & Financials
HDFC Bank to consider its first-ever bonus issue and special dividend on July 19—a key catalyst for those stocks

6. Commodities & Industrial
Precious metals and other commodity-linked sectors are seeing gains amid global market rotation
Indira Securities Pvt. Ltd.

Investor Insights
With FIIs on the sidelines, domestic investors are now the primary drivers of market momentum.

Interest rate outlook is turning dovish—RBI may trim rates again if disinflation continues.

Pharma stocks benefit from tariff deferments—but tariff policies remain a tail risk.

Sector rotation is underway: investors shifting focus to cyclical industries like autos, pharma, and industrials.

Trigger events to watch: Q2 earnings (banks, autos, tech), RBI policy outcome, and any U.S. tariff developments.