Dalal Street Action In Upcoming Week: From Q1 Results To Budget Anticipation; All You Need To Know!

The Indian stock market has begun July on a high note, achieving its longest winning streak since December 2023. This bullish rally is driven by the return of foreign funds and stabilized investor sentiments, spurred by the re-election of Narendra Modi's government, dubbed "Modi 3.0". As the Union Budget 2024 approaches, the market is expected to see significant activity, with investors watching for any policy announcements that could impact stock prices. This article delves into the various factors driving the market, key upcoming events, and the outlook for the coming weeks.

The domestic equity benchmarks, Sensex and Nifty 50 have reached new lifetime highs, supported by favourable global cues and sectoral rotations. The 30-share BSE benchmark touched the historic 80,000 mark, achieving a 10,000-point bull run in a record 58 market sessions. Meanwhile, India's blue-chip Nifty 50 recorded another all-time high, marking its fifth consecutive week of gains, the longest streak this year. Key sectors such as IT, pharma, and energy have led these gains, with broader indices outperforming the benchmarks, posting gains of 2.4% to 3.4%.

The NSE Nifty 50 rose 0.09% to end at 24,323.85, driven by gains in energy stocks. Despite a slight dip of 0.07%, the S&P BSE Sensex mirrored Nifty's 1.2% weekly rise, also marking its fifth consecutive week of gains. This performance indicates strong investor confidence, buoyed by positive global and domestic cues.

Key triggers for the coming week:
Q1 Results
The coming week will be crucial as investors focus on the first batch of Q1FY25 results. Major IT companies Tata Consultancy Services (TCS) and HCL Technologies will kick off the earnings season on July 11 and 12, respectively. Other notable companies reporting their Q1FY25 results include Delta Corp, Tata Elxsi, Nelco, and IREDA.

Union Budget 2024
The highly anticipated Union Budget 2024 will be presented by Finance Minister Nirmala Sitharaman on July 23, 2024. This budget will be the first under Modi 3.0's administration. The session, approved by President Droupadi Murmu, will run from July 22 to August 12. Investors will look for policy measures that could impact various sectors and overall economic growth.

Domestic Macroeconomic Data
On the domestic front, key economic data releases will include industrial production and inflation rate figures for June, scheduled for July 12, 2024. These indicators are vital for assessing the country's economic health and can significantly influence market sentiment and policy decisions. Strong industrial production and controlled inflation could further boost investor confidence.

IPO and Listings Activity
The primary markets will see some action with new IPOs and listings. The SME segment will witness Sahaj Solar's IPO opening for bidding on July 11. Among ongoing issues, Ambey Laboratories' IPO will close on July 8, while Effwa Infra and Research IPO and Ganesh Green Bharat IPO will close on July 9.

Several companies will debut on stock exchanges, including Emcure Pharmaceuticals and Bansal Wire Ltd on July 10. Ambey Laboratories will list on NSE SME on July 11, while Effwa Infra and Research and Ganesh Green Bharat will debut on NSE SME on July 12. These listings will provide fresh investment opportunities and could influence market dynamics.

Foreign Institutional Investors (FII) Activity
FIIs have extended their buying spree, purchasing equities worth Rs 6,875 crore this week, while domestic institutional investors (DIIs) sold equities worth Rs 385 crore. After a brief hiatus, foreign portfolio investors (FPIs) have turned net buyers in June, driven by reduced market volatility. According to NSDL data, FPIs invested Rs 7,962 crore in Indian equities, with total investments, including debt, standing at Rs 14,128 crore as of July 5.

Global Cues
Global markets will also play a crucial role in shaping investor sentiment. The robust performance of US markets will be closely monitored. Key economic data from China, Germany, and the US, including the US inflation report on July 13, could impact market movements. The report could influence the Federal Reserve's rate decisions and overall market sentiment.

Analysts believe that a weakening US labour market and economic slowdown might prompt the Federal Reserve to consider rate cuts in September. US Federal Reserve Chair Jerome Powell's testimony on July 9, along with UK GDP data, US core CPI inflation, initial jobless claims, and US PPI data, will be key events to watch.

Oil Prices
International crude oil prices have been volatile, recently hitting a two-month high due to low US oil inventories. However, prices settled lower after ceasefire discussions in the Middle East (Gaza) outweighed the strong summer fuel demand and potential supply disruptions from Gulf of Mexico hurricanes. Brent crude futures settled at $86.54 a barrel, while US West Texas Intermediate (WTI) crude futures closed at $83.16 a barrel. These fluctuations in oil prices could impact inflation and, subsequently, market movements.

Corporate Actions
The coming week will be filled with corporate actions, with several major companies and banks trading ex-dividend, ex-split, and ex-bonus. Companies like Petronet LNG, JSW Steel, Ujjivan Small Finance Bank, AU Small Finance Bank, DCM Shriram, Sun Pharmaceutical, Indian Oil Corp (IOC), and Axis Bank will trade ex-dividend by July 12. Additionally, Raymond will undergo a spinoff. These corporate actions could result in stock-specific movements.

Sectoral insights:
IT Sector
The IT sector is set to be in the spotlight as TCS and HCL Technologies release their Q1FY25 results. The sector has shown resilience, driven by digital transformation initiatives and strong demand for IT services globally. Investors will look for positive commentary on future growth prospects and any signs of margin pressures or demand slowdowns.

Pharma Sector
The pharma sector has also been a significant contributor to market gains. With the ongoing global health concerns and increasing demand for healthcare products and services, companies in this sector are expected to perform well. Key players like Sun Pharmaceutical, which will trade ex-dividend this week, are closely watched by investors.

Energy Sector
Energy stocks have been a major driver of the recent market rally. With fluctuating crude oil prices and geopolitical tensions impacting supply chains, companies in this sector are experiencing significant volatility. However, strong fundamentals and favourable government policies are expected to support continued growth.

Banking and Financial Sector
The banking and financial sector remains crucial to market performance. With several banks trading ex-dividend, including Ujjivan Small Finance Bank and AU Small Finance Bank, investors will be keenly watching their performance. Additionally, the potential impact of the upcoming Union Budget on the financial sector will be a key focus area.

The Indian stock market's bullish trend is likely to continue in the near term, driven by positive global cues, strong corporate earnings expectations, and renewed foreign investor interest. The upcoming Union Budget 2024 and key macroeconomic data releases will be crucial in shaping market sentiment. Investors should remain cautious and stay informed about global developments, corporate actions, and sectoral trends to make informed investment decisions.