Markets hit all-time high closing levels amid buying in last session of the week: What to expect on Monday?

The BSE Sensex gained 728 points, or 0.9 percent, to 81,332.7 during the week ended on July 26, while the Nifty rose 304 points, or 1.2 percent, to 24,834.8. Sector-wise, the BSE Power index was the top performer with a gain of 5.5 percent followed by BSE Healthcare (gain of 5.3 percent) and BSE Auto index (surged 4.8 percent). On the other hand, the BSE Bankex index declined by 2.5 percent.   

Market macros: Vinod Nair, Head of Research at Geojit Financial Services, said the Budget 2024-25 has not sparked any significant excitement in the market, while being both populist and prudent. The increase in short- and long-term capital gains taxes added to the volatility on the Budget day. Several measures are a reiteration of the Interim Budget and the broader market appears to be losing momentum due to a lack of new impetus. 

Although the government’s emphasis on fiscal discipline and growth is appealing, FIIs are cautious due to current high valuations and muted expectations for Q1FY25 results, he added. Meanwhile, DIIs continue to employ a “buy on dips” strategy, which contributed to market gains on the week’s last trading day, particularly in the pharma, auto, metal, IT, and FMCG sectors. He added, the market has now recovered its losses from the Budget day, driven by positive US GDP data and expectations of improved global demand.

“Moving forward, the direction of the domestic market will likely be influenced by the progress of the earnings season. Additionally, global economic updates, including US Fed & BoE monetary policies, US employment data, and Eurozone GDP figures, are expected to impact market trends,” Nair said. 

Market performance: As many as 37 stocks in the Nifty 50 index delivered positive returns for investors this week. With a weekly gain of 13 percent, Tata Motors emerged as the top gainer in the index. It was followed by HDFC Life Insurance (up 10.6 percent), Sun Pharma (9.3 percent), NTPC (8.8 percent), and Bharat Petroleum Corporation (8.2 percent). Titan, SBI Life Insurance, Cipla, and Divi's Labs also advanced by over six percent. On the other hand, Axis Bank, Wipro, and Nestle India declined 8.9 percent, 5.8 percent and 4.6 percent, respectively. 

Nifty outlook: Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C Mehta Investment Interrmediates expect the Nifty to test the 25,000 level. On July 25, domestic equity markets opened flat, mirroring global cues, he said. Despite a marginally positive start, the Nifty index experienced strong buying interest throughout the session. As a result, Nifty concluded the first day of August F&O expiry on a positive note at 24,835 with buying interest observed across all sectors. “Technically, the index formed a significant bullish candle on both the daily and weekly scales, indicating underlying strength. If the index sustains above 24,860 it may attempt to test the psychological level of 25,000,” Yedve said. 

Bank Nifty: Expecting a bullish reversal in Bank Nifty index Rupak De, Senior Technical Analyst at LKP Securities said, “On the daily chart of Bank Nifty, an outside day pattern has formed suggesting a possibility of price expansion. Additionally, the index has reclaimed the 50-period exponential moving average. Over the short term, the trend might witness a bullish reversal. Going forward, a move above 51,500 might induce a decent rally towards 52,500. On the lower end, support is placed at 51,000.”