The month of July has once again brought hopes for the Indian stock market. Statistics from the last several years show that July has often proved to be good for Dalal Street. This time too, fall in crude oil prices, strengthening of rupee, reduction in selling by foreign investors and decreasing tension in West Asia can support the market. In such a situation, market experts believe that Nifty may move towards new heights in July.
According to the data of Motilal Oswal Financial Services, in the last 10 years, Nifty and Nifty 500 indices have closed with gains in the month of July 8 times. During this period, Nifty gave an average return of 3.1 percent and Nifty 500 gave an average return of 3.2 percent. At the same time, Bloomberg data shows that Nifty Midcap 100 and Nifty Smallcap 250 indices have also been positive in 8 out of the last 10 July months.
Chandan Tapadia, Head of Technical and Derivatives Research, Motilal Oswal Financial Services, says that after the relatively sluggish movement of May and June, the market trend may be better in July. He estimates that if the trend of last years continues, Nifty 50 may register a rise of 500 to 700 points i.e. about 2 to 3 percent from the current level.
On Tuesday, Nifty closed at the level of 23,865.75. There was an increase of 1.35 percent in June. Whereas Nifty Midcap 100 recorded a rise of 0.1 percent and Nifty Smallcap 250 recorded a rise of 4.3 percent.
Sriram Velayudhan, Senior Vice President, IIFL Capital Services, says that the fall in crude oil prices, reduced tension in West Asia and better monsoon are positive signs for the market. According to him, in recent weeks Nifty has been trading in the range of 23,000 to 24,300 and in July it may once again touch the upper level of this range.
The prices of Brent crude have also come down significantly. From around $95 per barrel at the beginning of the month, it has fallen to around $74 per barrel. Continuously falling oil prices provide relief to importing countries like India and also have a positive impact on the costs of companies.
Experts believe that midcap and smallcap stocks can perform better than big companies in July. According to Chandan Tapadia, due to continuous selling by foreign institutional investors (FIIs) and weakness in the IT sector, there is pressure on largecap stocks. On the contrary, investors remain interested in midcap and smallcap companies.
He says that stability in rupee and crude oil prices is a positive sign for the market. Even if there is a slight decline in the market, investors can see it as a buying opportunity. In such a situation, there is a possibility of Nifty reaching the level of 24,500 to 24,750, while the level of 23,500 is being considered as strong support.
However, experts advise investors to take investment decisions only after keeping an eye on global developments, activities of foreign investors and quarterly results of companies.
