Indian stock market opened July on a spectacular note and achieved its longest winning streak since December 2023 amid the relentless bullish rally powered by the return of foreign funds and investor sentiments stabilising over Modi 3.0 coming to power. Bulls seem to have tightened their grip on Indian markets ahead of Union Budget 2024, which will be unveiled later this month.
In the second week of July, investors will keenly eye any Union Budget-related or government policy announcements as they may result in stock-specific action. The first set of April-June quarter results for fiscal 2024-25 (Q1FY25), domestic and global macroeconomic data, corporate announcements, foreign fund inflow, crude oil prices, and global cues will drive market movement this week.
Domestic equity benchmarks Sensex and Nifty 50 hit new lifetime highs last week supported by favorable global cues and rotational buying in leading sectors. The 30-share BSE benchmark achieving the historic 80,000-mark in its fastest-ever 10,000-point bull run covered in a record 58 market sessions.
India’s blue-chip Nifty 50 notched another record closing high in the previous session and chalked up its fifth straight week of gains, its longest such streak this year. Key sectors such as IT, pharma, and energy led the gains. Broader indices outperformed the benchmarks, posting gains of 2.4 per cent to 3.4 per cent.
‘’The recent indications of a potential rate cut by the US Federal Reserve, a rebound in foreign inflows, and a strong rally by private large-cap banking stocks have powered the Nifty 50 to extend its bullish streak. The resurgence in IT stocks has also supported the rally,” said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.
The NSE Nifty 50 rose 0.09 per cent on the day to end at 24,323.85 as gains in energy stocks helped it notch a record closing high for the fourth time this week. The S&P BSE Sensex settled 0.07 per cent lower at 79,996.6 points, but still managed to mirror both the Nifty’s 1.2 per cent rise this week and a fifth consecutive week of gains.
“The domestic market maintained its upward momentum, bolstered by the progressing monsoon and anticipation of the upcoming Union Budget. Globally, a reduction in US PCE inflation has raised hopes for a FED rate cut in September. Lower US inflationary pressure and a significant drop in the US 10-year bond yield led to outperformance in defensive sectors like IT and pharma,” said Vinod Nair, Head of Research, Geojit Financial Services.
In the coming week, primary markets will witness some action as few new initial public offerings (IPO) and listings are slated across the mainboard and small-and-medium enterprises (SME) segments. The week will be critical from the domestic and technical point of view as investors will track corporate results, Budget-related updates, and macroeconomic data.
‘’Any disappointing outcomes could potentially dampen the ongoing market rally in the short term”, added Nair. Overall, market analysts expect markets to consolidate at a higher zone, but the tone is likely to remain positive. Nifty 50 finds support at 24,100, however, a breakout above 24,500 could signal the next bullish phase. Experts advise traders to concentrate on stock selection, keeping in mind the potential for increased volatility.
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