Indices close the week and July on a strong note

Mumbai: India’s key equity indices logged their biggest monthly gains in three months this July, harnessing what analysts described as better-than-expected corporate earnings, which helped negate lingering concerns over elevated oil prices and geopolitical uncertainty. On Friday, the Nifty rose 66.45 points, or 0.3%, to close at 24,383.6. On the BSE, the Sensex rose 166.49 points, or 0.2%, to end at 78,094.64.

Both indices climbed more than 2.5% through the week and advanced nearly 2.1% in July.

Concerns over oil prices appear to have prevented further gains for the key gauges, which remained within a trading band through the last week of July.

“Despite Nifty ending the week higher, it has been unable to break out of its five-week range of 23,750-24,450, indicating continued indecision among market participants,” said Gaurav Sharma, head of research, Globe Capital Market. “While we remain uncomfortable with oil prices above $80 per barrel and escalation in the West Asia conflict, the earnings season has been better than expected despite a quarter marked by multiple disruptions and higher raw material costs.”

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Late on Friday, Brent crude futures were trading at $90 per barrel, compared with $71.6 at the start of the month.

Hitesh Rathi, technical analyst, Angel One, also said the Nifty has staged a strong recovery this week, and continues to trade within a broader range of 23,800-24,500.

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The index broke the strong support at 23,600 intermittently last Friday.

“We believe that unless the index breaks above 24,500 and closes above that level, it is likely to remain range-bound and witness a sideways movement,” he said. “We continue to see profit booking in the 24,430-24,450 zone.”

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On Friday, foreign portfolio investors net bought shares worth Rs 277 crore. Domestic institutions were buyers to the tune of Rs 2,260 crore. So far in July, foreigners have bought shares over Rs 10,000 crore — the first instance of buying since February.

The Nifty’s Volatility Index or VIX, commonly used to gauge the market sentiment, fell 3.3% to 11.76 levels. The gauge has fallen 12.2% in the past five sessions, indicating relief among traders.

Among broader market markers, the Nifty Midcap 150 gained 0.5% and Nifty Small-cap 250 rose 0.4%. For the week, these indices gained 2% and 1.8%, respectively.

Out of the total 4,425 stocks traded on the BSE, 2,522 advanced and 1,722 declined at close.

Sharma said the Nifty could be on the verge of a breakout above the key 24,500 zone, supported by strong earnings, easing oil prices and lower global volatility.

“We also believe the IT sector delivered better-than-expected results this quarter and is not lagging in the AI race. So, it should continue to outperform regardless of the performance of the Kospi or other AI and semiconductor stocks,” he said.

The Nifty IT index gained 6.8% for the week, coinciding with Korean benchmark Kospi’s net decline of 3.1%.

Elsewhere in Asia, Japan gained 4%, China advanced 0.7%, Hong Kong rose 0.1%, South Korea soared 17.9% and Taiwan jumped 8%.

The pan-Europe index Stoxx 600 was up 0.6% at the time of going to print.

“While the pharma and IT sectors have outperformed this week, the Bank Nifty continues to face selling pressure, and unless it recovers, the Nifty is unlikely to see a meaningful recovery from current levels,” said Rathi.