Sector Pulse – Nifty Capital Markets Index

Price Action Overview:

The Nifty Capital Markets Index has maintained a strong uptrend, extending its bullish momentum through the final week of June 2025. The index ended the month of June 2025 at 4,730.10, posting a gain of 475.30 points (11.17%). This marks a solid continuation following a brief consolidation in the previous week. The formation of a strong bullish candle reinforces buyer dominance, indicating sustained confidence among market participants in the capital markets segment. The trend reversal that began in late March 2025 has attracted steady buying interest, resulting in a bullish pattern of higher highs and higher lows. Notably, the breakout above the key resistance zone around 4,600 has held firm, and the latest candle suggests the index is building further strength above that level.

Moving Averages (20-Day EMA and 50-Day EMA):

• The 20-day EMA, currently at 4,507.90, is steeply rising and positioned well below the current market price. This indicates that the short-term trend is strongly bullish, and price remains in a leading position well above this average.

• The 50-day EMA, at 4,220.22, is also upward sloping and acts as a medium-term support level. The fact that the 20 EMA is above the 50 EMA and both are rising sharply confirms a strong bullish alignment.

RSI (Relative Strength Index):

The RSI (14) is currently at 69.76, hovering just below the overbought threshold of 80. This positioning implies that the index has strong upward momentum but has not yet entered overbought territory. It leaves some room for the rally to extend further before triggering caution signals. The RSI has bounced back from its recent dip and is once again rising, suggesting that buying momentum is re-emerging.

Trend Analysis:

The index delivered a weekly gain of 4.75% for the week ended June 27, marking a notable continuation of the consistent upside seen in previous weeks. From its bottom in March 2025 (2,900 levels), the index has rallied nearly 60% in just under four months, underscoring significant money inflows into the sector. The bullish trend has been clean with few corrective candles, showing confidence and strength among market participants.

Industry Analysis:

India’s capital markets are undergoing rapid expansion, driven by the strong performance of established financial institutions and the steady influx of new market participants. This momentum is further reinforced by proactive government policies, increased private sector engagement, and the accelerated adoption of digital and mobile technologies placing India among the fastest-growing digital investment ecosystems globally. As of FY25 (up to January 2025), the mutual fund industry’s Assets Under Management (AUM) stood at ₹68.05 lakh crore (US$ 789.44 billion), reflecting rising investor confidence. Systematic Investment Plan (SIP) inflows reached ₹2,37,427 crore (US$ 27.54 billion), indicating deeper retail participation across the country. Despite this progress, mutual fund penetration remains relatively low at 5–6%, pointing to significant untapped potential especially as the salaried middle-class population continues to grow. Additionally, the reduction in the tax burden in the Union Budget for 2025–26 is expected to enhance the investable surplus within this expanding demographic, further fuelling capital market growth.

Top Stock Picks from the Capital Markets Space to focus:

• Central Depository Services (India) Ltd – (Index weightage – 8.2%).
• Computer Age Management Services Ltd – (Index weightage – 5.72%).

Conclusion:

The Nifty Capital Markets Index remains in a strong bullish trend, reinforced by positive price action, rising EMAs, and a supportive RSI. The price is comfortably above key moving averages, and the RSI remains below overbought levels, suggesting that the rally may have further legs in the near term. After this strong rally, some consolidation or minor corrections could occur without disrupting the broader uptrend.

Key support levels to watch are the 20-day EMA at 4,507, the 4,265 level (December 2024 high), and the 50-day EMA at 4,220. On the upside, if the index sustains above 4,700, it could potentially rally toward new all-time highs around the 5,100 mark in the coming months. However, a break below the 4,450 level would signal a shift toward a bearish trend in the short term.

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Research disclaimer: Investment in the securities market is subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.