Stock market recap: Domestic equities extended their winning streak for a fourth consecutive session on 3 August, driven by a sharp 5% decline in Brent crude prices toward $84 per barrel amid easing U.S.-Iran geopolitical friction.
Nifty 50 surged 390.70 points (+1.60%) to close at 24,774.30, while BSE Sensex gained 544 points (+0.70%) to settle at 78,639. Market sentiment was further bolstered by a strengthening rupee at 95.31 per dollar, resilient Q1 corporate earnings, and renewed foreign portfolio investor (FPI) inflows following four months of net selling.
Sectoral performance was overwhelmingly positive, spearheaded by Nifty IT (+3.28%), private banks (+1.90%), FMCG (+1.72%), and metals (+1.54%). In comparison, Nifty Media lagged, dropping 3.09%. Market breadth strongly favored bulls with an advance-decline ratio of 2,360 advances to 1,027 declines. Mid- and small-cap indices also posted gains above 1.2% each.
Two stock recommendations by MarketSmith India:
Buy: Knack Packaging (current price: ₹197)
- Why it’s recommended: Strong packaging products portfolio, beneficiary of FMCG demand growth, diverse customer base, growing flexible packaging demand, expansion in manufacturing capacity, focus on value-added packaging, export growth opportunities, long-term packaging industry tailwinds, improving operational efficiency, strong customization capabilities, beneficiary of e-commerce growth, scalable business model, increasing demand for sustainable packaging, healthy growth potential, and niche market positioning.
- Key metrics: P/E: NA, 52-week high: ₹220.72, volume: ₹48.32 crore
- Technical analysis: Trendline Breakout
- Risk factors: Raw material price volatility, intense competition in packaging industry, customer concentration risk, margin pressure from input costs, dependence on FMCG demand, working capital intensive operations, execution risk in capacity expansion, regulatory and environmental compliance risks, pricing pressure from customers, economic slowdown affecting demand, supply chain disruptions, export demand fluctuations, technology upgradation requirements, limited scale compared to larger peers, and valuation risk during slower growth.
- Buy: ₹195–198
- Target price: ₹220 in two to three months
- Stop loss: ₹187
Buy: Anant Raj (current price: ₹626)
- Why it’s recommended: Strong presence in NCR real estate, diversified residential and commercial portfolio, growing data center business, large land bank, beneficiary of real estate upcycle, strong project execution track record, healthy cash flow generation, improving balance sheet, expansion in rental income assets, beneficiary of urbanization trend, growing demand for premium housing, strong development pipeline, data center growth opportunity, improving return ratios, and long-term infrastructure tailwinds.
- Key metrics: P/E: NA, 52-week high: ₹743.65, volume: ₹174.18 crore
- Technical analysis: Cup-with-handle base breakout
- Risk factors: Real estate market slowdown, project execution delays, regulatory and approval risks, high capital-intensive business, interest rate sensitivity, demand slowdown in property market, rising construction costs, working capital intensive operations, customer payment delays, geographic concentration in NCR, competition from large developers, economic slowdown affecting sales, data center execution risk, liquidity and refinancing risks, and valuation risk after strong re-rating.
- Buy at: ₹620–629
- Target price: ₹710 in two to three months
- Stop loss: ₹590
How Nifty 50 performed
Indian equity markets ended on a strong note, with Nifty 50 closing at 24,774.30, up 390.70 points (+1.60%), reflecting broad-based buying interest across large-cap stocks. Market breadth remained firmly positive, with 2,360 stocks advancing, 1,027 stocks declining, and 118 remaining unchanged, highlighting widespread participation in the rally. On the sectoral front, Nifty IT (+3.28%) emerged as the top performer, followed by Private Bank (+1.90%), FMCG (+1.72%), Metal (+1.54%), Auto (+1.48%), and Financial Services (+1.36%), indicating strength across both defensive and cyclical segments. Nifty Media (-3.09%) was the only major laggard, while Healthcare and Pharma posted modest gains. The benchmark traded in a relatively narrow range for most of the session before a sharp buying surge into the close, pushed it to the day's high.
Nifty 50 witnessed a decisive bullish session, gaining 1.60% and confirming a breakout above the falling trendline that had capped price action over the past few weeks. Following this breakout, the index extended its upward momentum and has now reached its 200-DMA, a key long-term trend indicator that often acts as an important inflection point. Momentum indicators continue to strengthen. The Relative Strength Index (RSI) has climbed to 66.9, moving firmly above its signal line and approaching the overbought zone, indicating robust bullish momentum while still leaving room for further upside. Meanwhile, the MACD remains in positive territory, with the MACD line trading above the signal line and the histogram continuing to expand, signalling strengthening upside momentum.
The index has staged a strong recovery after decisively breaking above a downward-sloping trendline, signalling an improvement in the near-term technical structure. Following the breakout, the index has advanced to its 200-DMA at 24,774, a crucial long-term trend indicator that market participants will closely monitor. A sustained move above 24,400 is likely to reinforce the positive momentum and could pave the way for an advance toward 25,000–25,200 in the coming sessions. On the downside, 24,500–24,400 is expected to act as an important near-term support area, with any pullback toward these levels likely to attract buying interest as long as the broader bullish structure remains intact.
How Nifty Bank Performed
Nifty Bank opened on a positive note at 57,569.60 and witnessed buying interest throughout the session. After briefly slipping to an intraday low of 57,465.95, the index attracted fresh demand and steadily recovered, eventually closing near the day’s high at 58,247.95, up 983.10 points or 1.72%. During the session, it touched an intraday high of 58,247.95, indicating sustained buying momentum into the close. The sharp rebound helped the index reclaim the 21-DMA while continuing to trade comfortably above the 50-, 100-, and 200-DMA, reinforcing the improving technical structure. The recent price action also resembles a bullish continuation pattern, with buyers consistently defending declines and gradually pushing the index toward the upper end of its recent trading range.
From a momentum perspective, the RSI has strengthened to 58.63 and moved decisively above its moving average of 51.29, reflecting improving buying momentum and strengthening price participation. Meanwhile, the MACD remains below its signal line, but the negative histogram has narrowed considerably, suggesting bearish momentum is fading and a bullish crossover may emerge if buying pressure continues. The combination of improving RSI, stabilising MACD, and strong price action around key moving averages indicates that sentiment is gradually shifting in favour of the bulls. Although confirmation through sustained follow-through buying remains important.
On the technical front, immediate support is placed around the 21-DMA near 57,520, followed by stronger support in 57,450–57,300, where the 200-DMA also offers an important cushion. On the upside, the 58,250 level acts as the first resistance, while a decisive breakout above this hurdle could pave the way for an advance toward the 58,800–59,000 region in the coming sessions. The recent recovery in broader markets, easing concerns over global risk sentiment, and improving banking sector participation are supporting the bullish setup. If the index sustains above the 21 DMA, the bias is likely to remain positive, with dips expected to attract fresh buying interest.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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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.