The broader indices underperformed the main indices in the week ended June 28 despite the smallcap index hitting a record high, with 60 smallcaps delivering double-digit returns (see the chart below). The main equity indices were also on a tear, crossing fresh milestones and extending their gains for the fourth consecutive week, led by FII support.
The BSE mid and smallcap indices gained 0.4 percent each, while the largecap index added nearly 2 percent during the week.
On June 28, the BSE Largecap index tested a new high of 9,476.14, while the smallcap index hit a new high of 5,2542.41 on June 25.
This week, the BSE Sensex gained 1,822.83 points, or 2.36 percent, to finish at 79,032.73, while the Nifty50 added 509.5 points, or 2.16 percent, to end at 24,010.60.
On June 28, the Sensex and Nifty50 touched record highs of 79,671 and 24,174, respectively. Both the benchmarks surged 6.5 percent each in June.
Among the sectors, the Nifty Energy index rose 3.3 percent, Nifty Oil & Gas added 3 percent, and Nifty Information Technology index was up 2.7 percent. However, the Nifty Realty index shed 2.4 percent, Nifty Media slipped 2.3 percent, and Nifty Metal declined 1.7 percent.
Foreign institutional investors (FIIs) extended their acquisitions this week, as they bought equities worth Rs 4,622.19 crore, while Domestic Institutional Investors (DII) bought equities worth Rs 7,186.13 crore.
"Indian benchmark indices recorded gains this week despite mixed signals from the global market, particularly regarding inflation concerns. Investor attention was predominantly on largecap stocks, resulting in underperformance of the mid and smallcap segments. The IT sector showed notable recovery, along with private banks, which outperformed public sector banks," said Vinod Nair, Head of Research, Geojit Financial Services.
"The cement and telecom sectors were in the limelight during the week, and Ultratech’s acquisition of a non-controlling stake in India Cements led to an expectation of further consolidation in the sector. On the other hand, telecom players are set to increase their tariffs, which could boost their average revenue per user (ARPU) and profitability," Nair explained.
"On the global front, the rise in US jobless claims and weak housing data have raised expectations of a rate cut in September. For the week ahead, focus will be on the release of US and Indian manufacturing PMI data, and the Fed Chair’s speech. The undercurrent is positive, with no major risk visible for the domestic market in the short term. All eyes will be on the union budget proposals, which will dictate the market in the medium term," he added.
The BSE Smallcap index gained 0.4 percent with Black Box, Kalyani Investment Company, Garden Reach Shipbuilders & Engineers, India Cements, GTL Infrastructure, Pilani Investment and Industries Corporation, Nalwa Sons Investment, PNB Gilts, Sharda Motor Industries, Rossell India, Bombay Burmah Trading Corporation, Solara Active Pharma, and Gulf Oil Lubricants India rising 20-34 percent.
However, Wardwizard Innovations and Mobility, Arman Financial Services, Tips Industries, Fino Payments Bank, SG Finserve, S H Kelkar & Company, AGS Transact Technologies, Swan Energy and CreditAccess Grameen fell between 10-19 percent.
Where is the Nifty50 headed?
Ruchit Jain, Lead, Research, 5paisa.com
Technically, the uptrend remains intact but the RSI (relative strength indicator) on the hourly chart is indicating the possibility of a pullback or consolidation within the uptrend. In case of any such pullback, we will see support at around 23,800, followed by the 23,600 mark. The positional support (20 DEMA) has now shifted higher to 23,400. On the other hand, resistance is seen at around 24,200, followed by 24,600.
Siddhartha Khemka, Senior Group VP, Head - Research, Broking & Distribution, Motilal Oswal Financial Services
The Nifty and the Sensex have both hit historic highs. We expect this positive momentum to continue at a steady pace with stock-specific action. However, the release of economic data points next week will mean a little volatility in the market. The auto sector is expected to be in the limelight as OEMs release their monthly auto sales numbers.
Amol Athawale, Vice President – Technical Research, Kotak Securities
The short-term market appears bullish, but due to temporary overbought conditions, we could see some profit-booking at higher levels. For trend-following traders, 24,000 / 79,000 and 23,900 / 78,700 will act as a key support zones. Above that, the bullish sentiment is likely to continue. On the higher side, the market could rally up to 24,175-24,300 / 79,500-79,800. On the other hand, the sentiment could change if the market drops below 23,900 / 78,700. Below that, we could expect technical correction till 23,775-23,650 / 78,400-78,000.
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