NIFTY OUTLOOK FOR TUESDAY 2 JUL 2024

Overview

Indian benchmark indices bounced back from the previous session’s losses and closed higher on July 1, 2024. The Nifty ended above the 24,100 mark, and the Sensex gained 443 points to close at 79,476, marking an increase of 0.56%. The Nifty rose by 131 points, closing at 24,142, up by 0.55%. This positive movement was observed despite a mixed sectoral performance, with significant gains in IT, financials, and metals, while energy and realty sectors faced declines.

Market Performance

• Sensex: Closed at 79,476, up by 443 points.
• Nifty: Closed at 24,142, up by 131 points.

Sectoral Performance

• Gainers:
  • IT: Rose nearly 2%, driven by renewed strength in IT stocks.
  • Financials: Showed decent gains alongside metals.
  • Metals: Continued to perform well.
  • Cement Stocks: Witnessed significant buying traction, contributing to sectoral gains.
• Losers:
  • Energy: Dipped around half a percent.
  • Realty: Experienced a slight decline.
  • PSU Banks: Ended the day with a loss of 0.76%.
  • Power: Was among the few sectors that ended in the red.

Broader Market Performance

• Midcap Index: Added more than 1%, hitting a fresh record high.
• Smallcap Index: Also advanced over 1%, outperforming the benchmark indices.

Market Sentiment

The consistent buying interest on dips indicates strong bullish control, likely to maintain the current upward momentum. The renewed strength in midcap and smallcap segments adds further positivity to the market sentiment. The formation of a reasonable positive candle on the daily chart, placed beside the small negative candle of the previous session, suggests that the minor negative sentiment created on Friday has been nullified.

Chart Analysis

• Positive Chart Pattern: The higher tops and bottoms pattern remains intact, with a minor higher bottom formed last week. This suggests the market is on an uptrend towards forming another higher top at new highs.
• Bullish Engulfing: The daily chart indicates the presence of strong momentum, suggesting the index is heading toward the 24,250-24,400 zone.
• Support Levels: Immediate support is placed at 23,940 and 23,980 levels, indicating a higher shift in support.

Key Influences

• US PCE Inflation: The reduction in US PCE inflation has raised hopes for a rate cut by the FED in September, contributing to the strong performance of IT stocks.
• US Job Data and Fed Chair’s Speech: Investors are focused on upcoming US job data and the Fed Chair’s speech for further indications on interest rates.

Top Performers

Gainers

• Tech Mahindra
• Wipro
• Bajaj Finance
• UltraTech Cement
• Grasim Industries

Losers

• NTPC
• Eicher Motors
• Dr Reddy's Labs
• SBI
• Apollo Hospitals

Conclusion

The Indian market's performance on July 1, 2024, reflected a positive start to the week, with benchmark indices erasing previous session losses and ending higher. The bullish momentum, coupled with strong buying interest on dips and renewed strength in midcap and smallcap segments, indicates a positive underlying trend. Traders are advised to focus on sectors with rotational participation and consider adding positions during market pauses or dips. The market is expected to target the 24,400 level in the near term, with strong support levels ensuring stability.