Market Rally Expected To Continue Into July, Says Analyst

Despite a slight decline from today's high, the overall market structure remains bullish, according to Rajesh Palviya, senior vice president, technical and derivatives research, Axis Securities Ltd. The rally could extend further into the July series, potentially reaching 24,200–24,300, according to him.

Major positions remain intact, and many large-cap stocks continue to show strength, he said.

"I think, overall, the structure is still bullish. This is just a pause for expiry. Till we are holding 23,900, there is still possibility that you know again we may attempt to move towards 24,000, even for expiry," Palviya said.

Even Bank Nifty is adding ground above the 52,500 level. This shows there is scope to attract buying interest as most of the large-cap banks are contributing to this rally, he said.

"We believe that the continuation of the up-move is likely to be there in the July series and we may see further higher levels from here onward also."

India's benchmark equity indices saw a third day of record close on Thursday. The NSE Nifty 50 claimed its psychologically crucial 24,000 mark and rose the most in a futures and options series this year.

The Nifty closed up 175.70 points, or 0.74%, at 24,044.50, while the S&P BSE Sensex closed 568.93 points, or 0.72%, higher at 79,243.18. Both the Nifty and Sensex rose 0.92% during the day to 24,087.45 and 79,396.03, respectively.

Chakri Lokapriya, managing partner at RedStrawBerry, expects significant market upside due to possible interest rate cuts in the upcoming budget. The gains are likely to stem from profit-taking and sector rotation, according to him.

The broader market, encompassing large companies in sectors such as infrastructure, industrial defence, and railways, remains strong, he said. "The broader market is still very poised," he said, emphasising the substantial expansion within these sectors.

Conversely, certain Nifty sectors, including financials, have underperformed, but this will change as these sectors begin to show earnings re-acceleration, Lokapriya said. "As financials start to display earnings re-acceleration, the Nifty will catch up."

With Adani acquiring ACC Ltd. and Ambuja Cements Ltd., UltraTech Cements Ltd. needed to boost its southern market share. This stake acquisition will raise UltraTech's share to 20% in the South region, while Ambuja will hold 15–16%. Strategically, this deal makes a lot of sense for UltraTech, both in terms of expansion and brands, Lokapriya said.

UltraTech Cement will buy a 23% stake in India Cements Ltd., according to an exchange filing on Thursday. The leading cement maker will buy shares in India Cements at Rs 267 apiece, closing the deal within one month.

Palviya noted the sharp upward movement in India Cements' stock and its approach to multiple supply zones on the long-term monthly chart. "If there's follow-up buying action around the 285-288 zone, we could witness another rally, targeting 320-330 in the short term," he said.

Palviya advised those who already hold or wish to buy the stock at the current level to maintain their positions with a stop loss of around Rs 275 per share. The bullish trend in the broader market and the continuous buying interest in outperforming stocks are positive indicators for another potential rally, he said.

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