Indian equities are poised to reach 24,500, marking a significant surge, as the 50-stock index achieved fresh closing highs on Wednesday, driven by a rally in private banks. Heavyweights HDFC Bank Ltd. and ICICI Bank Ltd. played a pivotal role in fueling this rally. According to Rupak De, senior technical analyst at LKP Securities, the index’s ascent above 24,300 signifies a shift towards long trades with strong momentum expected to persist as long as it remains above 24,000. Speculation suggests that the index could potentially climb towards 24,500, although a drop below 24,000 could result in consolidation.
The Bank Nifty index displayed robust momentum by surpassing the 53,000 hurdle on a closing basis. Kunal Shah, senior technical and derivative analyst at LKP Securities, stated that the immediate support now lies at 52,500, presenting a favorable opportunity for new long positions if the index dips to this level. Ruchit Jain, lead research analyst at 5Paisa Ltd., anticipates that the bullish trend in the banking sector will be sustained by heavyweights along with the recovery of private sector banks and many information technology companies from lower levels.
Furthermore, with Indian banks witnessing a decline in gross non-performing assets to a 12-year low, there is an optimistic outlook for the sector’s performance in the near future. Vinod Nair, head of research at Geojit Financial Services, highlighted the positive developments in the banking sector. The Nifty July futures and Nifty Bank July futures are currently reflecting promising trends with open interest figures and activity concentrated at specific strike points for July 4 expiry series, signaling the market’s direction for the coming days.
In addition, overseas investors turned net buyers on Wednesday after a streak of selling, with foreign portfolio investors acquiring stocks worth Rs 5,483.6 crore. Conversely, domestic institutional investors turned net sellers for the first time in three sessions, offloading equities worth Rs 924.4 crore. The broader indices exhibited a strong performance, with both S&P BSE Midcap and Smallcap indices closing higher. Except for BSE Oil and Gas, all sectoral indices on the BSE ended on a positive note, with the S&P BSE Bankex leading the gains.
Key market players in the banking and financial sector such as Bajaj Finance, Tata Steel, Vedanta, Bandhan Bank, and L&T Finance reported favorable financial metrics and strategic developments. The positive momentum in Indian equities mirrors the trends in the Asia-Pacific region and the US stock market, influenced by economic data and rate cut expectations. With the Nifty and Bank Nifty charts displaying promising patterns and options data, investors are poised to navigate the markets with cautious optimism and strategic trading decisions.
