Market Hits New Highs with IT Rally; Dharmesh Shah Picks BEL and LTIMindtree For 15 July

On Friday, the stock market saw IT stocks join a month-long rally, driven by Tata Consultancy Services’ positive earnings. This pushed the Sensex and Nifty 50 to new record highs. The Sensex rose 0.78% to 80,519.34, and the Nifty 50 increased 0.77% to 24,502.15. This marked a 0.7% rise for the week, making it six weeks of consecutive gains.

Market Overview

Vinod Nair from Geojit Financial Services noted that the market is feeling a mix of excitement and fear due to lower profit predictions for Q1FY25 and hopes for a growth-focused budget. Confidence was boosted by strong GDP forecasts for FY25 and unexpectedly low US inflation, which increased the chances of a US Federal Reserve rate cut in September.

Upcoming Focus

Next week, the focus will be on Q1 earnings from major companies like Infosys and Reliance, according to Santosh Meena of Swastika Investmart Ltd. Pre-budget discussions and global factors like the US Federal Reserve Chairman’s speech, US retail sales data, and Japanese economic data will also be crucial.

Market Outlook by Dharmesh Shah, ICICI Securities

Dharmesh Shah, Vice President at ICICI Securities, highlighted the following points:

• The index remained rangebound but ended the week positively, forming a small bull candle indicating a continued uptrend despite slowing momentum.
• The sustained rallies with minor pullbacks above the 10-day EMA show market strength, with potential movement towards 24,800 in the coming weeks. Expect some volatility, but dips should be seen as buying opportunities with immediate support at 24,100.
• IT sector gains, driven by US rate cut expectations, are positive due to the sector’s significant weight in the Nifty.
• Strong domestic fund flows, firm global setups, budget expectations, and monsoon progress will influence market direction.
• Good market breadth supports the ongoing uptrend, although midcap and small cap indices are overbought, suggesting selective buying is wise.

Key Support Levels

• Revised support base is now at 24,100, aligning with a 38.2% retracement of recent up moves and the 20-day EMA.

Bank Nifty Outlook

• Expect consolidation in the 53,500-51,700 range due to overbought conditions.

Top Stock Recommendations

1. Bharat Electronics Ltd (BEL)
   • Buy in the range of ₹325-335.
   • Target: ₹375.
   • Stop loss: ₹307.
2. LTIMindtree Ltd
   • Buy in the range of ₹5,440-5,570.
   • Target: ₹6,100.
   • Stop loss: ₹5,124.