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Sensex, Nifty log highest July-month return in 23 years; what’s next?

Sensex, Nifty log highest July-month return in 23 years; what’s next?

As many as 26 stocks in the Nifty index managed to deliver over 10 per cent return to investors in July.

Sensex, Nifty log highest July-month return in 23 years; what’s next? Sensex, Nifty log highest July-month return in 23 years; what’s next?

As bulls made a smart comeback on Dalal Street, the benchmark equity indices BSE Sensex and NSE Nifty managed to register their highest return for July month in 23 years. The 30-share index Sensex climbed 8.58 per cent, or 4,551.31 points to 57,570.25 on July 29 from 53,018.94 on June 30, 2022. Likewise, the 50-share index NSE Nifty gained 8.73 per cent to 17,158.25 during the month. Prior this, both of these indices posted their biggest July month gain of around 10 per cent in 1999.

As many as 26 stocks in the Nifty index managed to deliver over 10 per cent return to investors in July. With a rally of 37.65 per cent, Bajaj Finserv emerged as the top gainer in the Nifty index. Bajaj Finance, IndusInd Bank, Tata Steel, Asian Paints, Hindalco and Titan Company also gained over 20 per cent in July.

Market watchers believe that positive global cues and ease in selling by foreign institutional investors aided sentiment during the month. Sentiment buoyed further across the global markets after Fed states that it will slow the pace of rate increases at some point to assess the impact of higher rates on the economy and inflation.

Sectorwise, the BSE Realty index climbed the most by 17.04 per cent in July. It was followed by BSE Metal (up 16.96 per cent), Capital Goods (up 14.19 per cent), Consumer Durables (up14.04 per cent) and FMCG (up 12.52 per cent).

Vinod Nair, head of research, Geojit Financial Services said, “The market perceived that aggressive monetary policy will soon come to an end. This added optimism in the domestic market.”

The forthcoming week is going to be very crucial as it’s the start of the new month and there will be lots of macroeconomic data to guide the markets. S&P Global Manufacturing will be released on August 1 and S&P Global Services PMI on August 3. Auto and cement stocks will be reacting to their monthly sales numbers at the start of the week.

Apart from the economy, traders will be waiting for the Reserve Bank of India (RBI) announcement of a bi-monthly monetary policy review from August 3-5, 2022. In line with the global trend of monetary policy tightening to cool off inflation, the apex bank is likely to hike the repo rate by 35 basis points.

Functioning of parliament’s monsoon session's progress will be watched and traders will be anxious about whether the government can pass the Insolvency and Bankruptcy Code (Amendment) Bill to strengthen the Insolvency and Bankruptcy Code by introducing provisions on cross-border insolvency and certain other amendments for a time-bound resolution of stressed assets while maximising their value.

Corporate earnings of Bank of Baroda, MCX, Barbeque-Nation Hospitality, Castrol India, ITC, UPL, Zomato, Bosch, Siemens, Adani Power, Godrej Consumer Products, Vodafone Idea, InterGlobe Aviation, Inox Leisure, Lupin, Adani Enterprises, BHEL, Britannia Industries, Dabur India, Gail (India), Mahindra & Mahindra, Muthoot Capital Services, Nykaa, Petronet LNG, Titan Company will also be in focus next week next.

Commenting on the further movement of the domestic equity market, Apurva Sheth, head of market perspectives, Samco Securities said, “The short-to-medium-term. The trend is still optimistic, and investors can seek entry points around 16,800 and 16,600 levels.”