Weekly Market Analysis: Record Gains on Dalal Street and What to Expect Next

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The record run continued on Dalal Street as markets gained for fifth consecutive week. Here's our take on this week gone by, some stories you might have missed out on, and our thoughts on what to do going ahead, in your weekly report.

Weekly Recap

Market Peaks

  • Markets were broadly up this week, scaling fresh record highs and closing the week 1.3% higher than last Friday's levels amid positive global cues and extended support from foreign investors.
  • The broader markets outperformed the key benchmarks, with the BSE Mid and Small-cap indices gaining 3% and 4%, respectively.
  • Although there were some moments of instability, overall volatility expectations significantly decreased, with the India VIX dropping about 10% over the week.

Zoomed-Out Fundamentals

  • As we conclude the first week of July, excitement for the 2024 Budget and the Lok Sabha's monsoon session has fully kicked off. 
  • This week marked the start of bullish trends in domestic industrial and manufacturing sectors, which are expected to receive strong backing in the upcoming Budget.

The Winners

  • ONGC led the pack this week with a 5.1% increase, likely driven by the surge in crude oil prices. 
  • Infosys, along with the entire IT sector, did incredibly well, achieving a 4.7% rise following Goldman Sachs’s upgrade of its growth forecasts and price target.

The Losers

  • Titan declined by 3.9% over the week, following Kotak's downgrade from "add" to "reduce," attributed to heightened margin and competitive pressures. 
  • Private banks also faced a downturn this week, with the sector overall posting a 0.5% loss. IndusInd Bank, a major player in the sector, experienced a more significant drop of 2.1%.

Meanwhile…

  • The UK’s FTSE 250 made a noticeable gain on Friday as the general election resulted in a landslide win for the Labour Party, which has made economic growth a priority.
  • US jobs data showed a slight cooling in labor markets, with unemployment creeping to above 4% for the first time in over 2 years, boosting the case for rate cuts.

At home, SEBI issued a directive on uniform pricing that could significantly affect discount brokers and brokerage fees in the days to come. Find out more: SEBI's New Directive on Uniform Pricing: Impact & Analysis

Brief

Key Indices
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Market Outlook

Market Outlook
Sectors to Watch
Stocks in Radar: Apollo Hospitals, Dr Lal Pathlabs, Mphasis, TCS, Dr Reddy's

Our Take

  • The markets are currently experiencing a strong rise in investor optimism and expectations for the upcoming Budget, which we expect will sustain the current upward momentum. 
  • Consequently, we predict a bullish trend in the Nifty this week, with a projected trading range of 24,000-25,000. However, it is essential to navigate this situation with caution and not get carried away by the prevailing trend. Learn more in our article: Markets At All-Time High: Here's What Every Smart Investor Needs To Know
  • Moving forward, we expect stock and sector-specific action driven by India Inc’s June quarter earnings. Investors will also focus on upcoming inflation data from India, the US, and China.

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