Nifty & Dow Jones Hit All-Time High: Will This Pave the Way for a New Nifty Era Post Budget? | Weekly Update July 19th

Hello, Readers!

With Budget session scheduled on Tuesday, though the investors turned cautious on Friday, the Indian equity markets continued its bull run for the seventh consecutive week. And it wasn’t just the Nifty, in fact, even the Dow Jones made a record high this week. Is a new era of growth for the Indian market on the horizon? Or is the market going to finally see the long-anticipated correction after the budget? Let’s dive in as soon as we look at what happened in the markets this week.

🧾In this Article

📈Weekly Market Wrap-up

The Indian stock markets continued their bullish trend for the seventh consecutive week, although the gains were flat. The key benchmark indices closed with gains in three out of four trading sessions during the week (markets were closed on Wednesday). The Sensex managed a modest gain of 85.31 points (0.11%) to close the week at 80,604.65. The Nifty inched up by 28.75 points (0.12%) to finish the week at 24,530.9. While the headline numbers suggest minimal movement, this week saw pockets of volatility across sectors and individual stocks. during the week. This week, IT stocks led the rally, fueled by robust performance in the June quarter (Q1FY25) and anticipation of an interest rate cut by the Federal Reserve. Meanwhile, the six-week rally for mid- and small-cap stocks came to an end. This week, the Nifty Midcap 100 index fell by 2.21%, while the Nifty Small Cap 100 index declined by 2.91%. Friday was a volatile session for the markets. Despite the Nifty and Sensex touching the record highs of 24,854 and 81,587 respectively, both the indices ended the last trading session of the week in the red. Not just the broader markets, but all the sectors closed the day in the red.

Sector Spotlight:

Among the sectoral indices, the IT sectoral index emerged as the strongest performer, rising 1.99%. It doesn’t come as a surprise after strong quarterly numbers reported by IT bigwigs – including Infosys. The closing price for the BSE IT index was 40,620.28. This was followed by the BSE FMCG index, that gained 2%, to close the week at 22,058.75. However, several other sectors experienced a decline. The Consumer Durables sector took the biggest hit, falling a significant 4.47%. The closing price for the BSE CG index was 71,599.17. The Consumer Discretionary sector (BSE CD) also witnessed a drop of 2.57%, closing at 57,500.54. The BSE HC Index ended the week at 38,156.16, down 0.63%.

Nifty 100 Top gainers:

SBI Life Insurance: ₹1647.9 (▲5.7%)

Life Insurance Corporation: ₹1109.4 (▲5.53%)

Infosys: ₹1792.85 (▲4.72%)

ONGC: ₹319.65 (▲4.14%)

Hindustan Unilever: ₹2726.65 (▲3.98%)

Nifty 100 Top losers:

Hindustan Aeronautics Limited (HAL): ₹4801.2 (▼12.52%)

Siemens: ₹6835 (▼10.25%)

Trent: ₹5166 (▼8.53%)

Bharat Electronics Limited (BEL): ₹306.3 (▼8.1%)

Havells India: ₹1765.5 (▼7.58%)

FII and DII Activity:

Interestingly, there was a reversal trend in the FII and DII activity this week. Foreign Institutional Investors (FIIs) turned net buyers of equity during the week, the domestic institutions (DIIs) turned net sellers. FIIs injected a net amount of ₹10,945.98 crore into the Indian stock markets during the week while DIIs offloaded a total of ₹4,226.29 crores of Indian stocks. This indicates that domestic investors may be taking some profits off the table or being more cautious about the market.

Date	FII Net Activity	DII Net Activity
19-Jul-24	₹1,506.12 cr	– ₹461.56 cr
18-Jul-24	₹5,483.63 cr	– ₹2,904.25 cr
16-Jul-24	₹1,271.45 cr	– ₹529.48 cr
15-Jul-24	₹2,684.78 cr	– ₹331 cr
Total	₹10,945.98 cr	– ₹4,226.29 cr
Month till date	₹21,664.63 cr	₹779.09 cr

Global Gossip:

Stock markets experienced a pullback this week, even though the Dow Jones managed to reach a record high. While the Dow closed with a small gain of 0.72%, the broader market story was one of decline. The S&P 500 fell 1.97%, the Nasdaq dropped 3.65% snapping a six-week string of gains as several of the index’s mega-cap technology stocks slid. FTSE 100 dipped 1.18% compared to last week. European markets mirrored this trend, with the DAX experiencing a steeper decline of 3.07%. In Asia, the Nikkei 225 and Hang Seng also retreated, falling 2.74% and 0.45% respectively. Emerging markets showed some resilience, with the Jakarta Composite Index experiencing a minor dip of 0.40%, while the Shanghai Composite managed a slight increase of 0.68%. The European Central Bank kept its key interest rate unchanged, staying in a holding pattern for now after announcing an initial rate cut at a meeting last month.

Rupee Report:

The Indian Rupee started the week on a positive note, appreciating 3 paise to open at ₹83.63 against the US dollar and closed at 83.64/USD on Friday. This positive movement was driven by foreign fund inflows into the Indian stock market and a steady Brent crude oil price. However, the Reserve Bank of India’s focus on controlling inflation, as highlighted in their latest commentary, might limit the rupee’s gains in the coming days.

Gold Surges:

Early in the week, hopes of US interest rate cuts sent gold prices soaring to a record high of $2,482.29 per ounce. However, stronger US economic data later in the week dampened those hopes, making gold less attractive as an inflation hedge. As a result, gold prices tumbled by Friday evening, closing around $2,400 per ounce, a decline of approximately 1.5% from the previous Thursday.

🍟 Quick Bites

⚠️ Microsoft outage causes world to a standstill affecting the operations of airports, airlines, banks, media outlets and health care among other industries. With systems crashing around the world, airports and airline industries took a serious hit with flight delays, cancellations, manual check-ins, and even halting of flights. Indigo, Spicejet, Vistara and Air India flights in India experienced major issues in India.

💰 India’s forex reserves hit record $666.85 Billion on 12th July, rising for a second straight week.

✈ Domestic air traffic grew 5.76% to 1.32 crore in June, with IndiGo leading at 80.68 lakh passengers (60.5% market share).</div >

💍 India’s gems & jewellery exports dipped 7.44% to ₹57,273 crore (April-June), though gold jewellery rose 12.25% to ₹18,553 crore.

📱 Reliance Jio gained 21.9 lakh mobile subscribers in May, compared to Airtel’s 12.5 lakh and Vi’s loss of 9.24 lakh.

⛽ Government raised windfall tax on crude oil to ₹7,000 per tonne (from ₹6,000).

🌍 India’s trade deficit widened to $20.98 billion in June (vs $19.19 billion last year).

📈 India’s wholesale inflation hit a 16-month high of 3.4% in June.

🍽️ Swiggy and Zomato hiked their platform fee to ₹6.

💊 India launched its first overseas ‘Jan Aushadi Kendra’ for affordable medicines in Mauritius.

💡 Toshiba will invest over ₹500 crore to expand power equipment production capacity in India

🔎 Stocks in news

💊 Glenmark Pharma’s anti-seizure drug Topiramate got US FDA approval.

🏍️ Eicher Motors launched a new Royal Enfield bike ‘Guerilla 450’ priced at ₹2.39 lakh.

🛫 GMR Airports handled over 1.06 crore passengers in June, a 7.8% year-on-year rise.

📜 ZEE issued a $239 million international bond through private placement.

📉 Bajaj Electricals’ CEO Anuj Poddar resigned.

💊 Mankind Pharma signed a deal with Takeda Pharma to sell acidity drug Vonoprazan in

📄 Cipla received a ₹773.44 crore tax notice for FY16-FY23.

💰 Aurobindo Pharma approved a share buyback of up to ₹750 crore (record date: July 30).

🤝 Adani Group’s joint venture with Sirius International acquired AI startup Coredge.io.

⚖️ The Supreme Court agreed to consider Vodafone Idea’s request related to AGR dues.

💰 ZEE shareholders approved raising ₹2,000 crore through various means.

🚨 SEBI issued an ‘administrative warning’ to Paytm for board-unapproved transactions.

🚢 Garden Reach Shipbuilders received an order for a research vessel worth ₹840 crore.

🚌 Ashok Leyland got a ₹981.45 crore order for 2,104 Viking buses from Maharashtra ST.

💧 HUL sold its water purifier business Pureit to A.O. Smith India for ₹601 crore.

💼 Aurobindo Pharma considered share buyback and other matters in a board meeting.

🏠 Birla Estates bought land in Gurugram for a residential project with expected revenue of over ₹1,400 crore.

🏦 SBI increased loan interest rates on some terms by 0.10%.

🏛️ RBI granted ‘fit and proper’ approval for bidders involved in IDBI Bank privatization.

📊 LTIMindtree secured a multi-million-dollar contract extension with Absa Bank.

👕 Apparel manufacturere and exporter Pearl Global Industries raises ₹149.5 cr through QIP issue.

✈️ SpiceJet board to consider fund raise via QIP on July 23

📈 1QFY25 key results this week

💼 Infosys’ net profit rose 7.12% to ₹6,368 crore in Q1 and revenue jumped 3.6% to ₹39,315 crore.

Reliance Industries Ltd.’s net profit declined 17.9% sequentially to ₹17,445 crores; margin contracts by 120 basis points. Revenue fell 1.9% QoQ to ₹2.31 lakh crore

🔍 LTIMindtree’s net profit dipped 1.49% to ₹1,135 crore in Q1 (April-June), while approving a Brazil subsidiary with a $1 million initial investment.

🎨 Asian Paints’ net profit slumped 24.5% to ₹1,170 crore in Q1, with net sales also down 2.3% to ₹8,943 crore.

💰 IIFL Finance’s gold loan assets under management dropped to ₹16,000 crore in June from ₹23,354 crore in March.

☂️ HDFC Life’s net profit climbed 15% to ₹477 crore for Q1, with net premium income up 9% to ₹12,510 crore.

🏦 HDFC Bank recorded standalone profit growth of 35% YoY at ₹16,175 crore; total income jumps 45%. Consolidated PAT for Q1FY25 was ₹7,448 crore, up 79 per cent YoY. Total income rose 18.90% to ₹15,675.15 crore in Q1 FY25

🏦 Kotak Mahindra Bank’s standalone PAT grew 81% YoY to ₹6,250 crore. However, the PAT was down -9.11% on a QoQ basis.

🏦Yes Bank standalone profit jumps 47% YoY to ₹502 crore, total income up 18% and net interest income jumps 12%

💼 Jio Financial’s net profit dipped 5.7% YoY to ₹313 crore in Q1.

✈️ SpiceJet narrowed its net loss to ₹423.7 crore for FY24, compared to a ₹1,513 crore loss a year prior.

🏦 L&T Finance’s net profit surged 29% to ₹686 crore in Q1, with net interest income rising 23% to ₹2,020 crore.

🏍️ Bajaj Auto’s revenue grew 15.7% year-on-year to ₹11,928 crore.

📰 DB Corp reported a net profit of ₹118 crore (up from ₹79 crore last year) and ₹590 crore in revenue (up 6.4% YoY) for Q1, with ad revenue rising 8.4% to ₹427 crore.

⚡ Havells’ net profit jumped 42.09% YoY to ₹411 crore in Q1 while revenue increased 20.12%.

🏗️ JSW Infrastructure Ltd.’s net profit fell 7.8% YoY to ₹297 crore. Revenue from operations increased 15% YoY to ₹1,010 crore.

🧃 Patanjali Foods records 199% profit jump to ₹263 crore in Q1 while its revenue fell by 7.7% YoY.

🏠 Oberoi Realty’s profit jumps 82% YoY to ₹585 crore while revenue was up 54% to ₹1,405 crore. Margin expands to 58% versus 52%.

♻️ Sustainability Corner

🛵 Electric scooter startup BluSmart raised ₹200 crore from investors including ResponsAbility, MS Dhoni’s family office, and Sumant Sinha.

🔆 Waaree Renewable Technologies Limited, a subsidiary of Waaree Energies Limited, bags a 22 MW AC / 30 MWp DC solar project contract from ISMT Limited, a Kirloskar group company.

🚀 IPO corner

Listings and subscriptions:

Shares of Sahaj Solar Limited had a strong debut on the stock market on July 19th, listing at ₹342, a significant 90% premium over its issue price of ₹180 per share.
Sanstar’s IPO received 4.16 times subscription on the first day of bidding.

Ongoing:

Sanstar Limited IPO: 19-23 July 2024

Upcoming SME IPOs:

SAR Televenture Limited Follow-on Public Offer (FPO): 22-24 July 2024

RNFI Services Limited IPO: 22-24 July 2024

V.L. Infraprojects Limited IPO: 23-25 July 2024

VVIP Infratech Limited IPO: 23-25 July 2024

Chetana Education Limited IPO: 24-26 July 2024

Manglam Infra and Engineering Limited IPO: 24-26 July 2024

Clinitech Laboratory Limited IPO: 25-29 July 2024

Aprameya Engineering Limited IPO: 25-29 July 2024

News:

Eyeing profitability and a potential IPO, sleep solutions startup The Sleep Company (TSC) has rapidly expanded its physical presence in India, reaching 100 company-owned stores in just two years. TSC aims to be profitable by FY25 and potentially go public then, targeting ₹1,000 crore in revenue and significant profitability within the next 2-3 years, says co-founder Harshil Salot.

📕With Dow Jones Hitting All-Time High & Budget Next Week Will Nifty See the Next Chapter of Growth?

This week Dow Jones Industrial Average hit an all-time closing high at 40,094.54 points on Tuesday after U.S. retail sales data supported the view that the Federal Reserve is approaching its easing cycle, reining in inflation while avoiding a recession. This achievement has sparked a question among investors: will this bullish trend in the US market pave the way for a new era of growth for the Nifty 50, India’s benchmark stock market index? The Dow’s Ascent The Dow’s recent surge can be attributed to several positive factors. Here’s a closer look at some key contributors:

Economic Rebound: The US economy has shown impressive signs of recovery post-pandemic. Unemployment rates are declining, consumer spending is on the rise, and corporate earnings are experiencing an upward trend. This overall economic optimism translates into investor confidence, fueling the stock market.

Low Interest Rates: To stimulate economic growth during the pandemic, the US Federal Reserve has kept interest rates near historic lows. This makes borrowing cheaper for businesses, allowing them to invest and expand, ultimately boosting the stock market.

Strong Corporate Performance: Many large US companies, particularly those in the technology sector, have reported stellar earnings recently. This financial health of major corporations inspires investor confidence and encourages them to invest in the market.

The Nifty’s Noteworthy Journey

Now, let’s turn our attention to the Nifty 50. The Nifty has also witnessed healthy growth in 2024, reaching its own record high of 21,928 points in January. Here are some factors driving this positive trajectory:

Robust Domestic Economy: The Indian economy is projected to grow at a healthy pace in 2024, backed by strong domestic consumption and government spending on infrastructure projects. This positive economic outlook fuels investor confidence in the Indian stock market.

Foreign Inflows: Foreign investors have been increasingly attracted to the Indian stock market * due to its attractive valuations and growth potential. This influx of foreign capital helps boost liquidity and drives up stock prices.

Strong Performance of Key Sectors: Certain sectors like IT, FMCG (Fast Moving Consumer Goods), and banking have been major contributors to Nifty’s rise.

These sectors have witnessed strong financial performance and positive investor sentiment.

The Road Ahead: Will the Dow’s Success Translate to the Nifty?

The correlation between the Dow and the Nifty isn’t always direct. However, strong performance in one market can sometimes influence investor sentiment in others. Here’s what we need to consider:

Global Market Sentiment: A generally positive global market sentiment, as evidenced by the Dow’s rise, could potentially lead to increased investor interest in other emerging markets like India, potentially benefiting the Nifty.

India-Specific Factors: Ultimately, the Nifty’s trajectory will depend heavily on India-specific factors like the pace of economic growth, corporate earnings performance, and government policies.

Investor Risk Appetite: Investor risk appetite plays a crucial role. If investors are comfortable taking on more risk in emerging markets like India, it could lead to further inflows and potentially propel the Nifty.

A Word of Caution

While the Dow’s success and Nifty’s recent gains are exciting, it’s important to remember that stock markets are inherently volatile. Past performance doesn’t necessarily guarantee future results. Here are some things to keep in mind:

Market Corrections: Even the strongest bull markets experience corrections, meaning periods of price declines. Investors should be prepared for some volatility in the future.

Global Events: Unforeseen global events, like geopolitical tensions or economic disruptions. can impact both the Dow and the Nifty.

Individual Research: It’s crucial to conduct your own research and due diligence before investing in any stock or market. Don’t blindly follow trends – understand the underlying fundamentals.

All eyes on Budget

The short-term market direction will be governed by the forthcoming union budget session on Tuesday. For the Nifty to truly establish a new era, India’s economic growth needs to remain strong, key sectors should continue their robust performance, and investor confidence should stay high. While there may not be a definitive answer yet, the outlook for the Nifty appears promising in the short to medium term. Remember, a well-diversified portfolio and a long-term investment approach can help navigate market volatility and ensure a smoother investing journey.

🗓️Upcoming key financial events for the week:

Date	Event
22-Jul-24	EUR French Flash Manufacturing PMI
	EUR French Flash Services PMI
	EUR German Flash Manufacturing PMI
	EUR German Flash Services PMI
	GBP Flash Manufacturing PMI
23-July-24	Union Budget 2024-25
24-July-24	USD Flash Manufacturing PMI
	USD Flash Services PMI
25-July-24	USD Unemployment Claims
	USD Advance GDP q/q
26-July-24	USD Core PCE Price Index m/m
	USD Revised UoM Consumer Sentiment