June 2024 was a dynamic month for the Indian stock market, characterized by volatility influenced by both global and domestic factors. The BSE Sensex and the NSE Nifty 50 witnessed fluctuations, reflecting investor sentiment impacted by economic data releases, corporate earnings, and geopolitical developments.
Throughout June, the Nifty 50 recovered all its Election Day losses within three trading sessions. This rapid rebound is among the swiftest recoveries in the history of Indian capital markets, primarily driven by substantial fund inflows.
According to SEBI’s data on foreign portfolio investors (FPIs), they were net buyers for 12 consecutive sessions from June 10 to June 26, injecting approximately INR 32,087 cr into Indian equities. During the same period, Domestic Institutional Investors (DIIs) contributed an additional INR 20,002 cr. On Election Day alone, retail investors purchased stocks worth INR 21,179 cr. This robust buying activity across various market participants has been a key factor in propelling the markets to new heights.
Date Wise Performance in June
- June 1-5: The market started the month cautiously, with the Sensex and Nifty experiencing minor corrections. This was due to mixed global cues and concerns over speculations of a rise in inflation.
Sensex: Opened at 64,200 points, dipped to 63,800 points.
Nifty 50: Opened at 19,100 points, dropped to 18,900 points.
Reason: Mixed global cues and rising inflation concerns. - June 6-10: The indices showed resilience, recovering from early losses as positive economic data, such as a higher-than-expected GDP growth rate for Q1 2024, boosted investor confidence.
Sensex: Rebounded to 64,700 points.
Nifty 50: Rose to 19,300 points.
Reason: Positive GDP growth data for Q1 2024. - June 11-15: Mid-month saw a surge in market activity, driven by strong performance in the IT and Banking sectors. Key stocks like TCS, Infosys, HDFC Bank, and ICICI Bank led the rally.
Sensex: Surged to 65,200 points.
Nifty 50: Climbed to 19,500 points.
Reason: Strong performance in IT and Banking sectors. - June 16-20: The market faced headwinds again, primarily due to global geopolitical tensions and a slight rise in crude oil prices. This period saw a dip in indices, with metal and auto stocks facing the brunt.
Sensex: Declined to 64,600 points.
Nifty 50: Dropped to 19,200 points.
Reason: Geopolitical tensions and a rise in crude oil prices. - June 21-25: Renewed buying interest emerged, particularly in the FMCG and Pharmaceutical sectors. Stocks like Hindustan Unilever, ITC, and Sun Pharma performed well.
Sensex: Recovered to 65,400 points.
Nifty 50: Increased to 19,550 points.
Reason: Renewed buying interest in FMCG and Pharmaceuticals sectors. - June 26-30: The month ended on a mixed note with volatility, as investors booked profits ahead of the quarter-end. However, positive earnings reports from key companies provided some support.
Sensex: Closed at 65,100 points.
Nifty 50: Ended at 19,400 points.
Reason: Volatility due to profit booking positive earnings reports.
All-Time Highs
The Indian stock market reached an all-time high on June 22, 2024, with the BSE Sensex touching 65,500 points and the NSE Nifty 50 crossing 19,600 points. This milestone was driven by strong inflows from foreign institutional investors (FIIs), robust corporate earnings, and positive economic data.
On June 27, the Nifty 50 Index achieved a significant milestone by closing at a record high of 24,047 points. This event marked the 24th instance of an all-time high for the Nifty in 2024, and it was the first time the index surpassed the psychological threshold of 24,000 points.
Sector-wise Performance in June 2024
- Information Technology (IT): The IT sector performed robustly, driven by strong quarterly earnings and positive guidance from major players like TCS and Infosys.
Performance: TCS (+8%), Infosys (+7%), Wipro (+6%).
Reason: Strong quarterly earnings and positive guidance. - Banking: The banking sector showed mixed performance. While private sector banks like HDFC Bank and ICICI Bank showed strength, PSU banks faced some pressure.
Performance: HDFC Bank (+5%), ICICI Bank (+4%), State Bank of India (-2%).
Reason: Strong private sector performance, pressure on PSU banks. - Metals: This sector was under pressure due to fluctuating global metal prices and subdued demand.
Performance: Tata Steel (-5%), Hindalco (-4%).
Reason: Fluctuating global metal prices, subdued demand. - Pharmaceuticals: Pharma stocks gained due to strong earnings and positive regulatory news.
Performance: Sun Pharma (+6%), Dr. Reddy’s Laboratories (+5%), Cipla (+4%).
Reason: Strong earnings, positive regulatory news.
- FMCG: FMCG stocks were steady, with companies like Hindustan Unilever and ITC benefiting from strong consumer demand and pricing power.
Performance: Hindustan Unilever (+4%), ITC (+3%), Nestle India (+3%).
Reason: Strong consumer demand, pricing power.
Sectors and Stocks to Watch in July 2024
As we enter July, the Indian stock market stands poised for continued activity and potential growth, driven by robust economic indicators, corporate earnings, and sector-specific developments. Investors should anticipate focusing on key sectors like Information Technology, Pharmaceuticals, FMCG, Banking, Automobile, Real Estate, and Infrastructure, which are expected to deliver strong performances due to favorable conditions and strategic initiatives. Additionally, the market sentiment is likely influenced by ongoing foreign and domestic fund flows, regulatory changes, and global economic trends. With these dynamics in play, July presents a promising landscape for investors seeking opportunities in well-performing and undervalued sectors.
Sectors with Potential
1. Information Technology (IT):
- Reason: Continued demand for digital transformation services, strong order books, and positive earnings outlook.
- Stocks to Watch: TCS, Infosys, Wipro, HCL Technologies.
2. Pharmaceuticals:
- Reason: Strong pipeline of drugs, favorable regulatory environment, and increasing health awareness.
- Stocks to Watch: Sun Pharma, Dr. Reddy’s Laboratories, Cipla.
3. FMCG:
- Reason: Steady consumer demand, good monsoon predictions boosting rural consumption, and strong brand positioning.
- Stocks to Watch: Hindustan Unilever, ITC, Nestle India.
4. Banking:
- Reason: Improving asset quality, strong credit growth, and favorable interest rate environment.
- Stocks to Watch: HDFC Bank, ICICI Bank, Kotak Mahindra Bank.
Promising Stocks for July 2024
1. Reliance Industries:
- Reason: Diversified business model, strong performance in retail and telecom, and strategic investments in green energy.
2. Tata Consultancy Services (TCS):
- Reason: Consistent performance, strong order book, and leadership in the IT services sector.
3. Sun Pharma:
- Reason: Strong product pipeline, robust performance in both domestic and international markets, and favorable regulatory developments.
4. HDFC Bank:
- Reason: Superior asset quality, consistent financial performance, and strong retail banking franchise.
5. Hindustan Unilever:
- Reason: Leadership in the FMCG sector, strong brand portfolio, and benefits from rural consumption growth.
What Should Investors Expect in July?
Experts are optimistic about the Indian stock market’s performance in July, driven by a combination of stability, pro-growth policies, and favorable seasonal trends. Market participants look for stability, and Indian markets seem to provide the same (India VIX Index is down to more normal ~14 levels) with a stable coalition government, which is likely to continue with its pro-growth policies and approach.
“The newly formed government will try to do more for the lower-to-middle-class population, hence the growing optimism towards the budget. Should we see more relaxations in the budget, this will further boost the consumption story and support related stocks and sectors like financials, consumer, and logistics, amongst others,” says Mohit Mittal, global head of sell-side research at Acuity Knowledge Partners.
Additionally, from a seasonal perspective, July has historically been one of the most bullish months for Indian equity markets. “Nifty has closed positively in 9 out of the last 10 years with an average gain of 3.3%. With bulls sitting firmly in the driving seat and multiple factors like liquidity, seasonality, and momentum in Bulls’ favor, one can expect the rally to continue in July with a target of 24,500 on the index,” says Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities.
Bottom Line
The Indian stock market in June 2024 reflected a mix of optimism and caution among investors. The market reached an all-time high on June 22 and 27, driven by strong foreign inflows and robust corporate earnings. As we move into July, sectors like IT, Pharmaceuticals, FMCG, and Banking are poised to deliver better returns due to strong fundamentals, positive economic indicators, and favorable market conditions.
Investors should remain vigilant and adopt a balanced approach, considering macroeconomic trends and company-specific factors while making investment decisions.
