Can Nifty 50 touch 25,000 this month? Analysts see bank, auto, IT stocks driving the next leg up

The Indian stock market witnessed sharp selling pressure on Wednesday, tracking weakness in global equities after fresh US strikes on Iran reignited geopolitical tensions.

The renewed escalation raised concerns over global energy supplies and triggered a broad risk-off sentiment, prompting investors to book profits following the market’s recent rally.

The benchmark BSE Sensex crashed more than 1,600 points, while the Nifty 50 declined over 2% to slip below the 23,900 level. Broader markets also came under pressure, with the Nifty Midcap 100 and Nifty Smallcap 100 indices declining 1.55% and 2.24%, respectively.

Before Wednesday’s decline, the Nifty 50 had gained nearly 2% so far in July and had climbed above the 24,500 mark in the previous session — its highest level since April.

The recent uptrend has been supported by a combination of favourable domestic and global factors, including optimism surrounding the US-Iran peace deal, easing crude oil prices, and Foreign Institutional Investors (FIIs) turning net buyers in the cash market over the past few sessions.

With the index approaching key resistance levels, investors are now closely watching whether the Nifty 50 can scale the psychologically significant 25,000 mark this month.

Can Nifty 50 hit 25,000 in July?

Saurabh Jain, Head of Fundamental Research, SMC Global Securities believes that the Nifty’s ability to reclaim the 25,000 mark this month has become more challenging after Wednesday’s sharp correction of over 500 points, triggered by renewed fears that the US-Iran conflict could escalate further after the collapse of peace efforts.

“The spike in crude oil prices has raised concerns over higher inflation, pressure on India’s current account deficit, and the possibility of delayed interest rate cuts, leading to broad-based selling across sectors. Financials, IT, auto and consumption stocks remain vulnerable if geopolitical tensions persist, while defence, upstream oil & gas, and select energy-related companies could outperform amid elevated oil prices and higher defence spending expectations,” said Jain.

According to him, the market’s near-term direction will largely depend on geopolitical developments, crude oil prices and the upcoming corporate earnings season.

Technically, Nifty 50 recently broke out of a 477-point consolidation range on the daily chart and moved higher, even closing above its 200-day exponential moving average (EMA) on July 6. However, the index has struggled to sustain above this key technical level.

“Renewed tensions between the US and Iran have weighed on market sentiment. The RSI has also slipped below the 60 mark, indicating a pause in bullish momentum. Although July has historically been a strong month, with the Nifty ending higher in 15 of the past 20 years, FII participation in the cash market has remained relatively subdued. Moreover, the short covering witnessed over the past week has not been particularly aggressive,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

Given these factors, Shah believes the probability of the Nifty 50 touching the 25,000 mark this month remains extremely low.

According to him, the 24,400 - 24,450 zone, which coincides with the 200-day EMA, is likely to act as immediate resistance. A decisive move above this range could extend the pullback towards 24,600, followed by 24,750 in the near term. On the downside, the 24,030 - 24,000 zone, aligned with the 20-day EMA, is expected to provide immediate support.

In contrast, Hitesh Tailor, Technical Research Analyst at Choice Broking, remains optimistic about the index’s prospects.

“The Nifty 50 continues to maintain a constructive technical structure after finding support around the 24,100 - 24,200 zone. The index is gradually forming a higher-high, higher-low pattern on the daily chart, while the RSI, at around 57 on the daily timeframe and above the midpoint on the weekly chart, indicates that bullish momentum remains intact,” Tailor said.

He added that immediate resistance is placed in the 24,550 - 24,600 zone. “A decisive breakout above this range could accelerate buying interest and open the door for the index to test the psychological 25,000 mark during the month.”

Sectoral Outlook

According to Tailor, the Bank Nifty remains the key driver for the broader market.

“The Bank Nifty is trading within an upward-sloping channel, supported by rising moving averages, while heavyweight HDFC Bank continues to exhibit positive price momentum. A sustained move above the 58,500 - 58,600 zone could trigger the next leg of the rally in both the Bank Nifty and the Nifty 50,” he said.

Among sectoral indices, Tailor believes Pharma remains one of the strongest performers, supported by a clear higher-high, higher-low formation and sustained trading above key moving averages, reflecting continued buying interest.

The Auto index is also showing encouraging signs, consolidating near a crucial EMA support zone and appearing poised for a breakout above the 27,500 level. Such a move could further strengthen overall market breadth.

Meanwhile, the IT sector is showing early signs of recovery after finding support near a long-term demand zone on the weekly chart and forming a hammer candlestick pattern, indicating that selling pressure may be easing. A sustained recovery in IT could provide an additional boost to the benchmark index.

“Overall, the broader technical structure remains positive. As long as the Nifty 50 holds above the 24,000 support zone, the probability of testing the 25,000 mark this month remains favourable, led primarily by Banking, Pharma and Auto stocks, while an improving IT sector could act as an additional catalyst,” Tailor said.

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