Q1 results propelling stock-specific moves

Sustained by consistent buying from FIIs, healthy progress of the monsoon, good quarterly earnings, improved domestic and global data; the domestic stock markets extended gains for a third consecutive week. BSE Sensex rose 1.19 percent, or 780.45 points, to finish at 66,060.90 points and NSE Nifty gained 1.20 per cent, or 232.7 points, to end at 19,564.50 points. Both benchmark indices scaled new historic highs during the week. The Sensex hit 66,159.79 and the Nifty 19,595.35 points. Broader markets were also exuberant and the BSE Small-cap and Mid-cap indices gained 1.7 per cent and 1.3 per cent. The market continued to get booster doses from FIIs who bought shares worth Rs5,417.78 crore, while DIIs sold equities worth Rs1,251.29 crore. In this month, till date, FIIs have bought equities worth Rs14,582.63 crore and DIIs sold Rs8,129.50-crore worth of shares. Supported by FII inflows and easing of the US Fed rate hike worries; the Indian rupee added 57 paise to end at 82.17 against dollar. CPI rose for the first time in five months to 4.81 percent in June after hitting a 25-month low of 4.25 percent in May. The rise was mainly due to a surge in food prices and is expected to persist in July.

In the near term, the market may see some consolidation, while Q1 earnings will dictate individual stock moves. Global and domestic cues, FII and DII activities, progress of monsoon, and crude oil prices will be the key factors that will drive the markets in the coming days.

F&O/ SECTOR WATCH

With benchmark indices scaling record highs, derivatives segment witnessed heightened robust trading during the week ended. Option data clearly indicates that 20,000 can be a possibility for the Nifty in coming weeks. The maximum weekly Call Open Interest was at 20,000 strike, followed by 19,600 and 19,700 strikes. The maximum Put OI was at 19,500 strike, followed by 19,400 and 19,300 strikes. The Implied Volatility (IV) for Call options concluded at 10.21 per cent, while Put options closed at 11.07 per cent. The Nifty VIX, a measure of market volatility, ended the week at 10.94 per cent. The Put-Call Ratio of OI (PCR of OI) settled at 1.31 for the week. India VIX, which measures the expected volatility for the next 30 days in the Nifty50, dropped by 2.33 per cent from 10.94 to 10.68 levels, the lowest level since December 2019. Low VIX means low volatility thus making the trend more favourable for bulls. RIL has fixed July 20 as the record date to determine eligible shareholders for allotment of shares.

Traders are advised to keep focus on stock and sector-specific moves as index may remain volatile once again and may witness some choppiness as well.