Mumbai: India’s benchmark equity index Nifty 50 ended the June derivatives series on a high note and is now eyeing a potential 600-point rally in the new July series, aiming to reclaim record highs last seen in October 2024. The index closed 89 points higher at 25,638, marking its highest closing level since October 1, and extending its winning streak for a fourth straight session.
Investor sentiment remained buoyant throughout the week, despite the broader market trading in a relatively rangebound manner. The week concluded with frontline indices like the Nifty and Sensex posting over 2% weekly gains, their second consecutive positive close. Strong institutional flows, easing inflationary trends, and optimism around monsoon forecasts contributed to the bullish undertone.
One of the biggest contributors to this surge was the banking sector, with the Nifty Bank index climbing to a new lifetime high, breaching the 57,400 mark. Experts attribute this rally to robust credit growth, improving balance sheets, and anticipation of sustained policy support from the Reserve Bank of India (RBI).
The broader markets also showed impressive strength. The Nifty Midcap 100 index gained 0.27%, while the Nifty Smallcap 100 jumped 0.91%, both clocking their sixth straight day of gains and ending at their highest levels since January 3. Among sectors, Oil & Gas, Pharmaceuticals, and Healthcare emerged as top performers. However, Realty, Information Technology, and FMCG sectors witnessed mild profit booking.
Stock-specific action remained vibrant. IndusInd Bank rose over 3% amid reports that top private banking executives are being considered for the CEO post. Potential candidates include Rajiv Anand (Axis Bank), Anup Saha (Bajaj Finance), and Rahul Shukla (HDFC Bank), who is currently on sabbatical. This development added speculative interest in the stock.
In the global backdrop, U.S. index futures traded marginally positive ahead of the Personal Consumption Expenditures (PCE) inflation data, a key indicator watched by the Federal Reserve. The U.S. dollar index weakened, fueled by a disappointing Q1 GDP contraction of 0.5%, far below the previous quarter’s 2.4% growth. This data helped boost foreign interest in Indian equities.
Looking ahead, market experts believe the Nifty has entered a key resistance zone between 25,640 and 25,740, formed by a previous gap created on October 3, 2024. A decisive close above 25,740 could pave the way for a further upmove toward the psychological 26,000 mark, according to Nandish Shah of HDFC Securities. Immediate downside support lies at 25,317.
Rupak De of LKP Securities recommended a “buy-on-dips” approach, suggesting that the index might gradually scale higher toward 25,800, provided it sustains above 25,500. He cautioned that any breach below this level could lead to consolidation.
For the Nifty Bank, Om Mehra of SAMCO Securities noted that as long as the index holds above 56,800–57,000, the structure remains positive. A breakout above 57,500 could push it further toward 58,000, while 55,800 now acts as a near-term support.
With multiple tailwinds in play from domestic liquidity and strong earnings to global cues favoring emerging markets analysts expect a positive bias in the July series. As long as key support levels hold, the Nifty may well be on course to break into uncharted territory in the coming weeks.