We present a relativistic chiral theory of nuclear matter which includes the effect of confinement. Nuclear binding is obtained with a chiral invariant scalar background field associated with the radial fluctuations of the chiral condensate Nuclear matter stability is ensured once the scalar response of the nucleon depending on the quark confinement mechanism is properly incorporated. All the parameters are fixed or constrained by hadron phenomenology and lattice data. A good description of nuclear saturation is reached, which includes the effect of in-medium pion loops. Asymmetry properties of nuclear matter are also well described once the full rho meson exchange and Fock terms are included.