Trade Setup: Will Sensex Hit 80,000 Mark Soon? Key Factors To Drive the Indian Stock Market

Indian stock market is likely to witness a flattish to mild upside in the opening bell of July 1st, as investors will bet ahead of Q1FY25 earnings, and the Union Budget 2024 announcement. On Monday, auto, metal, and banking stocks will be in focus as companies will announce their monthly sales, operational performance, and provisional data. Last week, Sensex and Nifty touched a record high and ended the trading session from June 24-28 on a bullish note.

In the early trade of Monday, currently, Gift Nifty ranged from 23,889.5 to 24,174. While mixed trend was witnessed in global cues. For July 1, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects Nifty 50 to have support at 23,850, and resistance around 24,200, while Bank Nifty is expected to find support at 51,800 and resistance around 52,700.

Koothupalakkal has recommended buying three stocks on July 1. They are:

- BUY HERO MOTOCO cmp 5579.60 Stop Loss 5460 Target 5800

- BUY RAILTEL cmp 465.50 Stop Loss 455 Target 488

- BUY RCF cmp 193.20 Stop Loss 189 Target 204

On June 28, the Sensex ended at 79,032.73, down by 210.45 points or 0.27% after hitting a new lifetime high of 79,671.58. While Nifty closed at 24,010.60 lower by 33.90 points or 0.14% after the benchmark touched a new record high of 24,174. Overall, in the trading week from June 24-28, Sensex surged by 2,046.08 points or 2.7%, and the Nifty 50 gained by 601.45 points or 2.6%.

Explaining last week's performance, Pravesh Gour, Senior Technical Analyst at Swastika Investment Ltd said, "The Indian stock markets exhibited positive trends as the Sensex and Nifty indices both posted minor gains of 0.2%, marking their third consecutive week of growth. The Nifty Bank index, in particular, stood out with its largest weekly gain of 2024, surging by more than 3%. This impressive performance also signifies the Nifty Bank's longest winning streak in 19 months, as it recorded gains for the sixth straight week."

While Alex Volkov, Market Analyst at VT Markets said, "Traders are waiting with bated breath as they await inflation data, which could set the tone for the market's direction in the upcoming months."

This Week's Outlook:

Gour expects the market to trade sideways this week due to the absence of strong buying or selling triggers. While the underlying sentiment remains bullish, dips might attract opportunistic buying, which could support the market. However, strong rallies may be capped by profit booking.

This week, Gour added that sector-specific movements are anticipated amid budget-related buzz. Key factors to watch include the progress of the monsoon, which will be closely monitored for its near-term impact on investor confidence. The upcoming GST meeting may result in rate adjustments in certain sectors, potentially influencing market direction. Investors will also keep a close eye on FII and DII fund flows, as well as crude oil prices, to gauge overall sentiment.

On the global front, Swastika's senior analyst said, economic data like the US Q1 GDP data and the US core PCE price index will be released on 27th June & 28th June Respectively. The movement of the dollar index and US bond yields will be crucial.

Technically, Gour stated that the Nifty is trading volatile with a positive bias, where 23200 is an immediate and important support level. Below 23200, we can expect some profit booking towards the 20-DMA of 23000. On the upside, 23665 and 23800 are resistance levels.

Banknifty is showing strong momentum; however, 52000 is a trend-line resistance. 51000 is an immediate support level; below this, 50250 will be the next support level. On the upper side, 52000, 52600, and 53000 are resistance levels, the analyst added.

On the derivatives front, the analyst said, the long exposure of FIIs in index futures stands at 57%, whereas the put-call ratio is sitting at the 1.04 mark, both of which point to a bullish tilt in the market.

Looking ahead, several key economic events are on the horizon that could further influence market sentiment, as per Volkov.

Firstly, Volkov said, in Australia, the upcoming RBA Meeting Minutes will be closely watched, especially after May's higher-than-expected inflation data. Traders will be seeking clues on future rate hikes, which could impact economic forecasts and market sentiment. While in China, the Caixin Manufacturing PMI is expected to decrease slightly, reflecting a potential cooling in the country's economic momentum. This could signal a slowdown in China's recovery and impact global markets.

Further, Volkov added that the Euro Area will be closely monitoring inflation data, which will be critical for the European Central Bank's (ECB) next moves. A recent uptick in core inflation has already raised concerns, and the upcoming data will play a prominent role in shaping monetary policy.

Lastly, in the US, several important events are scheduled, including the FOMC Meeting Minutes, which will provide insights into the Fed's future rate plans. Recent signals have indicated fewer rate cuts than previously projected. Additionally, the Non-Farm Payrolls report will set the stage for economic expectations, with a forecast of 165,000 new jobs in June and an unemployment rate expected to remain at 4.0%, as per Volkov.

It will be keenly watched if these factors will push Sensex to hit the 80,000 mark on Monday or in the coming days this week.