Indian equity markets traded with renewed momentum as the benchmark Nifty crossed 24,100 points, with the index gaining 0.2% to 24,101.10 at 1037 IST. According to Vinay Rajani from HDFC Securities, the market is moving within a well-defined range after forming a long-leg doji candlestick pattern last week, indicating indecision among market participants. The index has been consolidating within a range for the last six to seven sessions, with last week's high at 24,261 and low at 23,784. As per Rajani, the broader market, which was previously outperforming, has started losing momentum on the upside and is showing weakness on the short-term charts. Overall, we may continue to consolidate within the current range.
Rajani noted that Nifty is currently holding above its 20-day and 50-day moving averages, which are coinciding around the 23,850 level. However, the index has not been able to surpass its 100-day exponential moving average, placed around 24,150. This indicates a complete consolidation phase—above the 20-day and 50-day EMAs but below the 100-day EMA—which shows that confidence is still lacking. On the downside, 23,800 to 23,780 remains an important support zone, with the broader market beginning to lose momentum in the short term. Unless this level is broken, we can continue to remain hopeful about the market, according to Rajani.
While the benchmark indices may remain range-bound, pharmaceutical and healthcare stocks emerged as the top performers with Nifty Pharma and Nifty Healthcare gaining nearly 2%. Dr. Reddy's Laboratories continued to be the top gainer in the 50-stock index, jumping over 4% to a 52-week high of ₹1,414.90 after receiving seven Form-483 observations from the US Food and Drug Administration for its biologics facility in Bachupally, Hyderabad. The observations came after an inspection conducted over June 16-25, with the company expressing confidence it could address the issues within the stipulated timeline. Max Healthcare Institute and Sun Pharmaceutical Industries were other major pharmaceutical stocks that rose in the index, up nearly 2%. For financials, Shriram Finance and Trent were up around 2%, while Kotak Mahindra Bank was the biggest laggard, down 3% on leadership uncertainty after CEO Ashok Vaswani refused reappointment.
The primary trend of the market remains upward, with financial stocks recommended for accumulation at lower levels. Rajani emphasized that dips should be bought in the current muted short-term setup, with 23,800 as the stop-loss on a closing basis. Pharma and healthcare sectors are currently outperforming, with the pharma index trading near its all-time high. Analysts continue to favour a stock-specific approach during the consolidation phase, with traders likely to watch the 23,800 support level closely for decisive market direction. The current phase largely reflects consolidation rather than a reversal, with selective sectors still performing well despite the broader market's weakness. Nomura maintains a 'buy' stance on Dr. Reddy's with a target price of ₹1,740, noting that the company's biosimilar Abatacept could contribute over 30% upside to earnings if launched in FY28-29.
