Broader indices outperform; more than 100 smallcaps gain double digit

Market This Week

The broader indices outperformed the main indices in the week ended July 26 helped by positive global cues, Q1 earnings and Budget announcements.

During the week, the BSE Midcap, LargeCap and Smllcap indices rose 3 percent, 1.5 percent and 3.5 percent, respectively.

In this week, BSE Sensex rose 728.07 points or 0.90 percent to finish at 81,332.72, while Nifty50 index added 303.9 points or 1.23 percent to end at 24,834.80.

On July 26, Nifty50 index touched fresh record high of 24,861.15, while BSE Sensex also went near to its record high of 81587.76.

On the sectoral front, BSE Power, Healthcare and Auto indices rose 5 percent each, BSE Telecom index added 4 percent and BSE oil & Gas index rose 3.4 percent. On the other hand, BSE Bank index shed 2.5 percent and Realty index fell 1.7 percent.

"The Budget 2024-25 has not sparked any significant excitement in the market, while it was both populist and prudent. The increase in short- and long-term capital gains taxes added to the volatility on budget day. Many of the 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. 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," said Vinod Nair, Head of Research, Geojit Financial Services.

"The market has now recovered its losses from 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," he added.

Foreign institutional investors (FIIs) turned net sellers in this week as they sold equities worth of Rs 4,721.26 crore, however, Domestic Institutional Investors (DII) turned net buyers as they bought equities worth Rs 8,109.78 crore.

The BSE Small-cap index added 3.5 percent with Antony Waste Handling Cell, Mahanagar Telephone Nigam, Bhagiradh Chemicals and Industries, PC Jeweller, Gravita India, Protean eGov Technologies, PG Electroplast, EMS adding 25-50 percent.

On the other hand, Ircon International, KSolves India, Phoenix Mills, VST Industries, Garden Reach Shipbuilders & Engineers lost between 10-13 percent.

The immediate supports like 10/20-day EMAs have been regained after violating below it recently. These moving averages have been offering supports for the Nifty in the last 5-6 weeks.

The positive chart pattern like higher tops and bottoms is intact on the daily chart and Nifty seems to have confirmed a new higher bottom formation recently.

The short-term trend of Nifty has turned into positive. The next upside levels to be watched around 25000-25100 in the near term. Immediate support is placed at 24650 levels.

This current upmove can extend towards 25350 – 25530. Support base now stands at 24400 which is the 20-day moving average.

The daily momentum indicator still has a negative crossover however we shall assign more weightage to the price action and ride the up move.

We expect an upward trending activity to continue and the index should move towards the next psychological resistance of 25,000 either continuously from the current levels or may be after a minor dip.

The short term moving averages are also below the price action and should continue to support the indices on any decline. Support for the Nifty is now seen at 24,650 and 24,450-500 levels.

On the higher side, immediate resistance for Nifty is at 24,850 levels and the next psychological resistance is at 25,000 mark.