Stock market update: The Indian equity market closed Friday's session on a strong note, driven by robust IT earnings and supportive global cues. The benchmark Nifty 50 surged by 244.10 points, or 1.02%, to settle at 24,206.90. This bullish momentum was mirrored in the broader market, where the advance-decline ratio strongly favoured buyers, recording 2,339 advances against 976 declines.
Market sentiment was heavily boosted by TCS's largely in-line Q1 results, which triggered an optimistic start to the corporate earnings season and fueled a broad-based rally across IT stocks, with the Nifty IT index gaining 1.96%. Additionally, strong Q1 business updates from the banking space propelled Nifty PSU Bank up by 3.03%, while Nifty Realty topped sectoral gains at 3.49%. On the macroeconomic and geopolitical fronts, market sentiment remained underpinned by reports that the US and Iran would continue technical talks despite recent clashes, relieving geopolitical anxiety.
Two stock recommendations by MarketSmith India:
Buy: Equitas Small Finance Bank Ltd (current price: ₹82)
Why it’s recommended: Strong retail lending franchise, diversified loan portfolio, growing secured loan mix, improving CASA ratio, healthy deposit growth, strong financial inclusion focus, expanding branch network, improving asset quality, healthy capital adequacy, strong retail customer base, digital banking initiatives, improving operational efficiency, scalable business model, attractive valuation potential, long-term credit growth opportunity.
Key metrics: P/E: 86.73 | 52-week high: ₹83.00 | Volume: ₹75.23 crore
Technical analysis: Trendline Breakout
Risk factors: Asset quality deterioration risk, retail credit default risk, interest rate cycle impact, margin pressure from deposit costs, regulatory risks for SFBs, intense banking competition, slower CASA growth, credit cost volatility, economic slowdown affecting collections, geographic concentration risk, liquidity and funding risks, rural and MSME exposure, technology and cybersecurity risks, earnings volatility during stress periods, valuation re-rating may take time.
Buy: ₹81-82
Target price: ₹100 in two to three months
Stop loss: ₹75
Buy: Knowledge Marine & Engineering Works Ltd (current price: ₹2,410)
Why it’s recommended: Strong marine infrastructure expertise, diversified port service offerings, growing order book visibility, beneficiary of port infrastructure growth, government focus on Sagarmala projects, strong dredging capabilities, long-term service contracts, expansion into new geographies, asset ownership provides entry barriers, growing inland waterway opportunities, beneficiary of maritime sector growth, improving operational efficiency, diverse government and port clients, capacity expansion opportunities, long-term infrastructure demand.
Key metrics: P/E: 81.17 | 52-week high: ₹2,440.00 | Volume: ₹43.73 crore
Technical analysis: Consolidation base breakout
Risk factors: Dependence on government contracts, order execution delays, working capital intensive business, high capital expenditure requirements, customer concentration risk, regulatory and environmental risks, project-based revenue volatility, weather-related operational disruptions, rising fuel and operating costs, tender award delays, economic slowdown affecting infrastructure spending, competition in marine services, asset utilization risk, interest rate and financing risks, valuation risk during weak order inflows.
Buy at: ₹2,386-2,422
Target price: ₹2,690 in two to three months
Stop loss: ₹2,270
Nifty 50: How the benchmark index performed on 10 July
Indian equity benchmarks ended the week on a strong note, with broad-based buying helping markets recover from recent volatility. The Nifty 50 advanced 244.10 points (+1.02%) to close at 24,206.90, while the Sensex rallied over 800 points, supported by robust gains in IT, banking and rate-sensitive sectors. Positive global cues, encouraging start to the Q1 earnings season led by TCS, and continued foreign investor buying lifted market sentiment despite lingering geopolitical concerns.
Market breadth remained decisively positive, with 2,339 stocks advancing, 976 declining and 95 remaining unchanged, reflecting broad participation beyond the frontline indices. Sectorally, Nifty Realty (+3.49%) and Nifty PSU Bank (+3.03%) emerged as the top performers, followed by Nifty IT (+1.96%), Nifty Metal (+1.48%), Nifty Financial Services (+1.41%), Nifty Oil & Gas (+1.31%) and Nifty Private Bank (+1.16%). Defensive pockets were relatively subdued, with Nifty FMCG (-0.08%) being the only sector to close in negative territory, while Pharma and Healthcare posted marginal gains.
From a technical perspective, the Nifty 50 continues to exhibit a constructive bias after closing at 24,206.90, with the index extending its sequence of higher lows despite intraday volatility. Price action indicates that buyers remain active on dips, while the recent rebound has kept the index above its short-term moving averages. However, the index is still trading below the long-term 200-day moving average.
The Relative Strength Index (RSI) is hovering around 56, remaining above the neutral 50 mark and turning higher after a brief pullback. The MACD remains in positive territory with the MACD line holding above the signal line, although the histogram has moderated, indicating that bullish momentum has eased slightly after the recent rally.
The Nifty 50 is currently trading near a crucial support zone of 23,800, which will be closely monitored in the coming sessions. A decisive breakdown below this level could intensify selling pressure and open the door for a decline towards the 23,600-23,500 region. On the upside, 24,300 remains the immediate and critical resistance level. A sustained move above this hurdle would be required to improve near-term sentiment and signal a recovery in market momentum. Until either of these levels is decisively breached, the index is likely to remain range-bound with a cautious bias, as investors await fresh triggers for the next directional move.
How did the Nifty Bank perform yesterday?
The Nifty Bank index opened on a positive note and extended its gains through the session after briefly testing its intraday low in early trade, reflecting sustained buying interest at lower levels. The index opened at 57,592.50, touched an intraday high of 58,251.95, a low of 57,576.70, and closed at 58,045.90, gaining 793.45 points (+1.39%) for the day. The strong close near the upper end of the day's range indicates that bulls remained firmly in control throughout the session.
Technically, the index has reclaimed the 10 DMA, 21 DMA and 200 DMA while continuing to trade comfortably above the 50 DMA and 100 DMA, reinforcing the improving short-term trend. Price action also suggests the formation of a higher-low structure, indicating that buyers are gradually regaining control and strengthening the ongoing recovery.
The RSI has improved to 58.38, rebounding from recent weakness and moving back above the neutral 50 level, indicating strengthening bullish momentum without entering overbought territory. However, the RSI remains below its signal average of 61.52, suggesting that momentum is improving but has not yet reached peak strength. Meanwhile, the MACD remains above the zero line, confirming that the broader trend is still constructive, although the MACD line has slipped below the signal line, indicating a short-term loss of momentum. This crossover warrants caution, but as long as the MACD remains in positive territory, the prevailing medium-term trend continues to favor the bulls.
Immediate support for the Nifty Bank index is placed around the 57,800–57,570 zone, where the 10 DMA and 21 DMA converge, followed by stronger support near 57,290 (200 DMA). On the upside, immediate resistance is seen around 58,250, while a decisive breakout above this level could pave the way for a move towards the 58,700–59,000 zone. The recent rebound, supported by improving market sentiment and renewed buying in heavyweight banking stocks, suggests that the index is attempting to resume its upward trajectory. However, participants should monitor quarterly earnings, global macro developments, and institutional flows, as these could influence near-term volatility. Holding above the key moving averages would keep the technical outlook constructive over the coming sessions.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.