Week Ahead

The market recouped all its losses from the budget day and recorded a new closing high on July 26, ending the week with a percent gains and starting the August series on a healthy note.

The Nifty 50 rallied 304 points or 1.24 percent to 24,835, and the BSE Sensex jumped 728 points or 0.9 percent to 81,333, continuing uptrend for eighth consecutive week. The Nifty Midcap 100 and Smallcap 100 indices outperformed benchmark indices, rising 3.3 percent and 2.5 percent respectively.

Going ahead in the coming week, the market is expected to remain positive along with consolidation and will take cues from the FOMC & Bank of England meetings, monthly auto sales numbers, and the next set of corporate earnings.

The June quarter earnings season has picked up the pace with 490 companies going to release the quarterly scorecard in the coming week including the Nifty 50 like State Bank of India, Tata Steel, ITC, Tata Consumer Products, Tata Motors, Titan Company, Coal India, Mahindra & Mahindra, Maruti Suzuki, Adani Enterprises, Adani Ports and Special Economic Zone, Sun Pharmaceutical Industries, and Divis Laboratories.

Apart from earnings and auto sales, Manufacturing PMI data for July will also be watched, releasing on August 1. The preliminary data indicated the HSBC Manufacturing PMI rose to 58.5 in July, from 58.3 in the previous month, signalling the healthy improvement in the sector.

Furthermore, the fiscal deficit and infrastructure output numbers for June will be announced on July 31, while the foreign exchange reserves for the week ended July 26 will be released on August 2.

Technically, the Nifty 50 turned strong with formation of long bullish candlestick pattern on the daily charts with higher high-higher low, as well as bull candle with long lower shadow, indicating buying interest at lower levels with above average volumes and positive momentum indicators. The index also climbed above all key moving averages. Hence, according to experts, the index may move towards 25,000-25,100 in the near term, with key support at 24,600-24,500 zone.

The weekly options data also suggested the 25,000 is expected to be the next target for the Nifty 50, with 24,500 as a support.