Stock market recap: Indian equities ended in the red for the fifth consecutive session on Friday, 24 July, as higher oil prices due to the US-Iran conflict continued weighing on market sentiment.
On Friday, the Sensex closed 332 points, or 0.43%, lower at 76,059.77, while the Nifty 50 ended at 23,767.45, down 102 points, or 0.43%. The Nifty Midcap 100 index slipped 0.10%, while the Smallcap 100 index dropped 0.32%.
As many as 36 stocks ended in the red in the Nifty pack, with Eternal, Bajaj Finance, and Mahindra and Mahindra losing the most.
For the week, the Sensex lost nearly 2,100 points, or 2.7%, while the Nifty shed 2.3%.
Two stock recommendations by MarketSmith India:
Buy: Satin Creditcare Network Ltd (current price: ₹268)
- Why it’s recommended: Strong microfinance franchise, large rural customer base, diversified lending portfolio, improving secured loan mix, healthy loan growth potential, strong collection efficiency, expanding branch network, beneficiary of financial inclusion, diversified funding sources, improving asset quality trends, strong capital adequacy, digital lending initiatives, experienced management team, scalable business model, and long-term rural credit demand.
- Key metrics: P/E: 8.52, 52-week high: ₹270.89, volume: ₹39.16 crore
- Technical analysis: 21-DMA bounce
- Risk factors: High exposure to microfinance loans, asset quality deterioration risk, credit cost volatility, regulatory risks in microfinance, economic slowdown affecting collections, dependence on rural income, geographic concentration risk, margin pressure from funding costs, intense competition from NBFCs and banks, liquidity and refinancing risks, political intervention risks, technology and cybersecurity risks, earnings volatility during stress periods, slower loan growth risk, and valuation risk during weak credit cycles.
- Buy: ₹265–269
- Target price: ₹325 in two to three months
- Stop loss: ₹249
Buy: Bharat Heavy Electricals Ltd (current price: ₹417)
- Why it’s recommended: Leading power equipment manufacturer, strong government backing, healthy order book visibility, beneficiary of power sector capex, strong execution capabilities, diversified engineering portfolio, beneficiary of infrastructure growth, opportunities in defence and railways, growing renewable energy exposure, strong manufacturing capabilities, expansion in industrial projects, long-term power demand tailwinds, improving operational efficiency, strong brand reputation, and turnaround potential in profitability.
- Key metrics: P/E: 60.09, 52-week high: ₹446.50, volume: ₹364.43 crore
- Technical analysis: 51-DMA Bounce
- Risk factors: Dependence on government capex, project execution delays, working capital intensive business, order inflow volatility, margin pressure from competition, regulatory and policy risks, slow customer payment cycles, high exposure to thermal power, rising raw material costs, competition from private players, capacity utilization risk, economic slowdown affecting investments, supply chain disruptions, PSU-related operational constraints, and valuation risk during weak order growth.
- Buy at: ₹413–419
- Target price: ₹465 in two to three months
- Stop loss: ₹395
Nifty 50 performance on 24 July
Indian equity markets ended lower, extending their recent corrective phase as investors remained cautious amid weak global cues and lingering geopolitical concerns. Nifty 50 declined 102.15 points (-0.43%) to close at 23,767.45, after recovering from an intraday low of 23,606.30, indicating buying interest at lower levels despite persistent selling pressure.
Sensex also finished in the red, reflecting subdued sentiment across frontline stocks. Sectoral performance was mixed, with Nifty IT (+0.82%), Media (+1.86%), and PSU Bank (+0.58%) outperforming, while Auto (-1.10%), Metal (-0.55%), Realty (-0.55%), Oil & Gas (-0.46%), and Pharma (-0.41%) remained under pressure. However, market breadth was marginally positive, with 1,703 stocks advancing, 1,596 declining, and 126 remaining unchanged, suggesting resilience in the broader market despite weakness in benchmark indices.
Nifty 50 extended its corrective phase. Importantly, the index has breached both the 50- and 100-DMA, indicating a deterioration in short- to medium-term momentum and signalling that bears have regained near-term control. Momentum indicators also remain cautious.
The Relative Strength Index (RSI) slipped to 42.87, falling below its signal line and remaining below the neutral 50 mark, indicating weakening buying momentum without yet entering oversold territory. Meanwhile, the MACD continues to trade below its signal line, with the histogram in negative territory, reinforcing the ongoing bearish momentum and the absence of a meaningful reversal signal.
The index has become technically weak after breaking below its 50- and 100-DMA and slipping beneath 23,800, signalling a deterioration in near-term market structure. However, the index found buying interest around 23,600, which coincides with the first gap-up recovery zone, making this a crucial level to watch. A decisive breach below 23,600 could accelerate selling pressure and expose the index to 23,300, followed by 23,000.
On the upside, the index needs to reclaim and sustain above 24,400 to indicate a meaningful revival in bullish momentum. Such a move would also confirm a breakout from the recent consolidation range, improving the overall technical outlook and paving the way for a potential advance toward 24,500–24,600. Until a decisive move occurs on either side, the index is likely to remain range-bound, with market participants closely monitoring price action around these key levels for the next directional cue.
How did Nifty Bank perform?
Nifty Bank opened on a positive note and, despite intraday volatility, attracted buying interest after testing lower levels, ending the session in positive territory. The index opened at 56,169.40, touched an intraday high of 56,831.45, slipped to a low of 56,023.60, and finally settled at 56,693.50, gaining 101.50 points (+0.18%).
Although the recovery from the day's low was encouraging, the index continued to trade below its 200-DMA and 21-DMA, indicating that near-term sentiment remains cautious. The price action also resembles a consolidation phase within a broader range, suggesting that participants are awaiting a decisive directional trigger before initiating aggressive positions.
The momentum indicators continue to paint a cautious technical picture. The RSI has slipped to 45.11, remaining below the neutral 50 mark and its signal line, reflecting weakening momentum and lack of strong buying conviction. Meanwhile, the MACD remains above the zero line but continues to trade below its signal line with a negative histogram, indicating that bullish momentum is fading and the recent corrective phase is yet to fully reverse. Unless momentum indicators begin to improve through a positive crossover and rising RSI, rallies are likely to encounter selling pressure at higher levels, keeping the short-term trend range-bound to mildly negative.
On the downside, immediate support is placed around 56,000–55,850, coinciding with the 100 DMA, followed by stronger support near 55,300–55,000. On the upside, immediate resistance is seen near the 200 DMA (57,413), followed by the 21-DMA (57,697). A decisive close above these levels would improve the technical structure and could pave the way for a move toward 58,200–58,500. However, failure to reclaim these moving averages may keep the index under pressure.
Mixed earnings expectations, persistent FII activity, and global macro developments are likely to influence sentiment. On the other hand, the prevailing technical setup suggests the index may continue to consolidate unless a strong breakout or breakdown emerges.
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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.