64 small-cap equities increase by 10 to 37% amidst a record Dalal Street rally.

A disappointing US inflation print fueled anticipation of a rate hike pause by the Federal Reserve, and international investors kept up their purchasing binge, pushing the market to record heights in the week ending July 14. The surge was able to maintain its momentum thanks to the improving monsoon and the rebound in IT businesses with decent results.

Both the BSE Sensex (up 1.19 percent, or 780.45 points, to 66,060.90) and the Nifty50 (up 1.20 percent, or 232.7 points, to 19,564.50) ended the day with gains. The benchmark indices both reached new all-time highs this week, closing at 66,159.79 and 19,595.35, respectively. Increases of 1%, 1.3%, and 1.7% were seen in the BSE Large-cap, Mid-cap, and Small-cap indices, respectively.

"The Indian stock markets enjoyed a spectacular week, with the benchmark index Nifty50 continuing its ascent for a third week in a row. The bulls' ambition to lift the market was on display in the widespread participation that coincided with the start of earnings season. According to Angel One's Senior Analyst for Technical and Derivative Research, Nifty50 index maintained its positive status and registered new highs to finish the week in uncharted territory, acquiring 1.20 percent of weekly gains.

The price behaviour of the benchmark index reflected the upward gains among global peers and the sectoral rotation that occurred throughout the week. Technically speaking, the bulls are showing remarkable resilience by not relinquishing their hold despite being overbought in several key indicators of their strength. However, after such a sharp upswing, it's important to not become too comfortable and write off the prospect of a rest.

He believes that the 19,400-19,300 range could act as a temporary floor, while the 19,200 range represents rock-solid support in the same time frame. On the other hand, there is no longer a relevant barrier to overcome because the index has moved into uncharted territory. The immediate target for the next service area could be somewhere between 19,650 and 19,700.

The BSE IT index gained 5%, the Metal index gained 3.25%, the Realty index gained 1.7%, and the Power index declined 2%.

The early local market weakness was caused by negative indications from the US markets and expectations of bad results in the IT sector. Investors became wary as food inflation rose in response to rising mandi prices that were going over the Minimum Support Prices (MSP) and to the relatively low level of Kharif sowing.

Future inflation will be heavily influenced by the monsoon's development and the trajectory of Kharif sowing in July. Vinod Nair, head of research at Geojit Financial Services, said that investors are more optimistic now that US inflation is under control since they expect a rate hike of 25 basis points to be enough to support the US economy.

As a result of this optimistic outlook, Indian IT stocks have seen heavy buying despite weak Q1 earnings. As a result, the value of the US dollar and bond yields have declined. The Indian stock market as a whole moved up to record highs on the back of optimistic forecasts for Q1 earnings, steady FII inflows, falling wholesale prices, and moderate volatility (VIX). Nifty Bank's performance lagged behind the rest of the index since the sector got off to a poor start during earnings season. However, he added, "investors are keenly anticipating additional earnings reports in the coming week to assess their trading direction.

Companies such as Zen Technologies, Lloyds Steels Industries, Pix Transmissions, Patel Engineering Company, Moschip Technologies, Mazagon Dock Shipbuilders, Precision Camshafts, HPL Electric & Power, Lloyds Metals and Energy, Xchanging Solutions, NELCO, Tejas Networks, and Allied Digital Services all saw gains of between 20 and 37 percent, contributing to a 1.7 percent increase in the BSE Small-cap index.

Delta Corp, Swan Energy, V2 Retail, RattanIndia Power, Heubach Colourants India, Mangalam Industrial Finance, Mangalore Chemicals and Fertilisers, Gulshan Polyols, Wardwizard Innovations and Mobility, and AMI Organics all had negative returns.

The value of equity transactions between FIIs and DIIs this week was Rs 5,417.78 crore for FIIs and Rs 1251.29 crore for DIIs.

So far this month, FIIs have sold shares totaling Rs 14,582.63 crore, while DIIs have sold shares worth Rs 8,129.50 crore.

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Where is Nifty50 headed?

Amol Athawale, Vice President - Technical Research, Kotak Securities

The Sensex jumped above the 66,000 level as IT stocks surged as earnings from some leading technology companies came in higher than expected. With US inflation cooling, investors are hopeful the Federal Reserve will hold off on raising interest rates later this month as the market is being swamped by high FII inflows. The creation of a bullish candle on the daily and weekly charts, as well as a breakout on the intraday charts, lends credence to an ongoing rise in the Nifty from its current levels.

Trend-following traders should use the level of 19,450 as a decision point, with 19,800 as a possible extension. If the market falls below $19,450, we could see a sharp decline to between $19,400 and $19,300.

The 20-day Simple Moving Average (SMA), or 44,500 for Bank Nifty, would be a key trend-determining level. If the index rises over that mark, it may try to re-enter the 45,250–45,600 range again. Below 44,500, however, the Bank Nifty may fall to the 50-day simple moving average (SMA), now around 44,000.

Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities

After breaking above 19,500, the Nifty is set to continue its upward path. After a solid Friday's trading, the Nifty's support moved higher, to 19,400 from 19,300.

The 44,554-point 20-day exponential moving average (DEMA) served as a floor for Bank Nifty. Bank Nifty's next support is around 43,500, so if it closes below that level, we could see more selling pressure. Bank Nifty buying enthusiasm can be stoked with a convincing close above 45,000.

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