On Friday, the Sensex closed at 54,481.84, up 303.38 points or 0.56%. The Nifty 50 closed 87.70 points or 0.54% higher at 16,220.60. Broad-based buying was seen across all sectoral indices with better performance of capital goods banking Shares are also supporting the gains. Metal stocks remained under pressure.
Both Sensex and Nifty 50 have gained over 3% this week.
Market BSE cap was around 2,51,59,998.80 crore by the end of July 8. valuation increased 7,72,870.07 crore with a market cap of Rs. 2,43,87,128.73 crore as on 1st July
Among the top 10 most valuable companies on BSE, Reliance Industries (RIL) continues to lead with market cap 16,17,879.36 crore followed by TCS 11,94,625.39 crore and HDFC Bank 7,75,832.15 crore. Infosys and HUL also ranked fourth and fifth by market cap 6,37,033.78 crore and 5,86,422.74 crores respectively. The others were – ICICI Bank whose market cap was . was 5,25,656.96 crore on LIC 4,47,841.46 crore, on SBI 4,35,922.66 crore, on HDFC 4,06,213.61 crore and Bharti Airtel 3,81,833.20 crore.
Commenting on this week’s performance, Vinod Nair, Head of Research, Geojit Financial Services said, “During the week, firming commodity prices saw a rally in the domestic market and lower FII sales. Fears of a recession have led to a fall in crude oil prices. However, the decline has fueled appetite for consumption, chemicals, logistics and OMCs as this will reduce the cost burden of these sectors.”
Nair said the fall in crude oil prices will quell inflationary fears, thereby reducing the burden on central banks to aggressively raise interest rates in the upcoming meetings. Positive domestic macro and business data by banks were other key factors that helped boost the market sentiment.
He further added, “At present, investors are preferring value over growth stocks, resulting in selloff in sectors like IT. Defensive sectors like FMCG may outperform on the back of strong cash flows, high governance, dividend policy and steady earnings growth.
This month, there has been an outflow of FPI funds 4,418 crore (including equity, debt, debt-VRR and hybrid markets) from the Indian market as on July 8. Overall, FPIs have pulled out massively this year As per NSDL data, Rs 2,31,708 crore from the market. So far in 2022, FPIs have emerged as net sellers only due to turmoil in macroeconomic factors.
Meanwhile, the rupee has hit an all-time low. The local unit closed at 79.26 against the US dollar at the interbank forex market on Friday amid a firm greenback, frequent foreign fund outflows and marginal decline in crude oil prices.
However, Nair also pointed out that the rally could fade as correction in commodity prices and tighter monetary policy are negative for the global economy, limiting earnings growth and valuation expansion.
Markets June 11 to June 15 Outlook:
Apoorva Sheth, Head of Market Perspectives, Samco Securities, said, “The coming week is going to test the market in many ways as several important events lie in line. The much-anticipated inflation numbers of USA, Producer Price Index (PPI), and jobless claims The figures of 2014-15 will keep global markets on their toes.Inflation problem is not limited to West only,so Indian inflation numbers which are set to be released will keep the markets back busy.Retail inflation eased to 7.04 in May % versus 7.79% in April, whether the declining trend continues or not is something that is eagerly awaited.”
“Apart from the macro data, the quarterly results will impact the market sentiment. Management comments on future earnings growth trajectory will be of interest to D-Street. With several significant events approaching, investors are advised to be careful and cautious in their investments. Decision is given,” Sheth said.
Nair said the first quarter earnings season will be the main focus of the market in the near future.
Giving outlook on Nifty, Sheth said, “It may face stiff resistance near 16,200 levels in the near term.” If it sustains above that level, the next hurdle could be near the 16,500 level. On the downside, 16,000 will act as a strong support level.
ICICI Direct analysts have given a bullish outlook on the markets ahead. The outlook is based on two key observations – a) breach of the key downward trend line that has been in force since April 2022 indicating the end of a two-month corrective phase b) the current pullback qualitatively vis–vis the pre-April pullback is better. Market breadth (measured by the percentage of stocks above the 50 DMA (51%), the strongest in two months, indicating broad-based participation). Among sectors, preference is given to BFSI, IT, auto, consumption and capital goods, while pharma witnesses stock-specific action.
On stocks, analysts at ICICI Direct said, “We prefer SBI, HDFC Bank, Infosys, Tata Motors, DLF, L&T, Titan in largecap while in midcap we prefer ABB, SKF, Persistent, Apollo Tyres, M&M Finance, I like Bajaj Electricals, Phoenix Mills, CCL Products, Indian Hotels and Kansai Nerolac.”
Shares of TCS and Avenue Supermarts will remain in focus post Q1 results. Companies such as HCL Tech, HDFC Bank, Mindtree, Tata Metaliks, ACC, L&T Infotech, Tata Alexi, JSPL, Federal Bank and L&T Technology Services will also be in focus ahead of their quarterly earnings next week.