These stocks gained over 19% this week; will the rally continue?

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It was another momentous week for the markets with the equity benchmark indices hitting fresh all-time highs during the week. On July 16, Sensex touched a fresh record high of 53,290 likewise the Nifty 50 index rose to a new peak of 15,962. This week Sensex rallied 753 points or 1.44% and Nifty 50 advanced 233 points or 1.49%. Momentum in the broader markets continued as the BSE MidCap index added 316 points or 1.39% to settle at 23,130 after hitting a new peak of 23,151. Similarly, the BSE SmallCap index rose 587 points or 2.27% to settle at 26,462 and touched a new peak of 26,510. Even the BSE 500 index settled at a record high of 21,864 gaining 325 points or 1.51% and touched a lifetime high of 21,895.

A closer look at the BSE 500 index shows that as many as 308 constituents of the index delivered positive returns to investors this week. With a gain of 24.74%, Cyient was the top performer of the week as its shares rallied to Rs 1,061.70 on July 16, 2021, from Rs 851.15 on July 9, 2021. Gujarat Fluorochemicals (up 23.75%), Happiest Minds Technologies (up 23.54%), JM Financial (up 19.83%), Computer Age Management Services (up 19.21%), were the other stocks that rallied over 19% this week.

“During the week, the domestic market was largely positive beating its global peers supported by favourable economic data. Inflation levels have shown gradual decline giving partial relief to the market,” said Vinod Nair, Head of Research at Geojit Financial Services.

Top gainers

Indiabulls Real Estate (up 18.88%), Ujjivan Financial Services (up 18.45%), Sobha (up 18.45%), Firstsource Solutions (up 18.01%), Welspun India (up 17.76%), DCM Shriram (up 16.26%), JSW Energy (up 15.44%), Vardhman Textiles (up 15.29%) and L&T Technology Services (up 15.07%) were among other majors gainers of the week.

Outlook

Market participants will be looking forward to Q1 June 2021 results, trends in global stock markets, the movement of the rupee against the dollar and crude oil prices will dictate trends on the bourses in the near term. Investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will be monitored. On the political front, the monsoon session of Parliament is scheduled to start from July 19. It will be the first session after the second wave of Covid-19. It will conclude on August 13 with 19 days of business.

Around 17 bills are listed for introduction in Lok Sabha, including five bills for consideration and passage, and a similar number of bills are expected to be introduced in Rajya Sabha during the session.

As we have stepped into the earning season, market momentum will be decided by outcomes of quarterly earnings and management commentary on recovery. Sectors like IT, Pharma and Realities have started showing increased buying interest in anticipation of strong quarterly earnings. We expect this sector-specific momentum to continue during the weeks ahead. However, lacklustre global market and FII net sellers are likely to increase volatility in the market, added Nair.