Highlights
- Rohit Srivastava sees Nifty targeting 25,000 after a decisive breakout above 24,310; 23,860 remains key support.
- Bullish on banking, real estate, auto and pharma; cautious on IT, while monitoring metals for a bottom.
- FMCG offers short-term trading opportunity, with the index potentially rising towards the 50,000–55,000 range in July.
Indian equities could be on the verge of a fresh breakout if the Nifty crosses the crucial 24,310 mark, according to market expert Rohit Srivastava. In an exclusive interview with ET Now, Srivastava shared his outlook for July, highlighting his bullish stance on banking, real estate, auto and pharma stocks, while cautioning investors about continued weakness in IT and metals. He also outlined key support and resistance levels for the Nifty and shared his targets for the Bank Nifty and Pharma index.
Market outlook and levels
The market is expected to maintain a positive bias throughout July due to seasonal trends. The crucial support level for the Nifty is at 23,860 and a breakout above 24,310 is expected to pave the way toward a target of 25,000.
Srivastava said, “we’ve ended the June expiry and with the first day of July now underway, I believe the market is likely to maintain a positive bias. There is a seasonal aspect to this, as markets have historically performed well during June, July and into August, with any correction typically coming later.”
“In terms of levels, 23,860 is the key support on the downside, and it is likely to hold, as it has done a couple of times already. On the upside, the key level to watch is 24,310. Once the market breaks above 24,310, it could pave the way for a smooth move towards 25,000. For now, the primary focus is whether we see a decisive breakout above 24,310,” he added.
Banking, real estate and auto
Banking, Real Estate, and Auto are highlighted as key areas of strength. The Bank Nifty is targeted toward 61,000, while Real Estate and Auto show strong momentum.
Srivastava said, “the sectors we are focusing on are the interest rate-sensitive ones, starting with banking. I believe banking will remain one of the best-performing sectors this year, and in this move, the Bank Nifty could head towards 61,000. The other sectors to watch are real estate and automobiles, both of which are interest rate-sensitive and derive much of their demand from borrowing. We initially saw strong momentum in real estate stocks, and they have continued to outperform. Even after the recent dip, they held up well while the broader market declined last week, which is a sign of underlying strength. I believe the real estate sector will continue to perform well.”
Talking about the pharma sector, Srivastava said, “From a longer-term perspective, the outlook is definitely bullish. The short-term selling, as you mentioned, could simply be due to a rotation of funds out of defensive sectors. As the market continues to rise and breaks out to higher levels, investors are likely to shift capital into large-cap and mid-cap growth stocks, which can lead to some selling pressure in defensive sectors.”
He said the Pharma Index has broken out above 23,600, which is a significant long-term breakout. “This suggests that, over a one-year horizon, the Pharma Index could move well above 30,000, potentially reaching 33,000. Overall, there is substantial upside potential in the medium to long term, and any setbacks are likely to be short-term corrections rather than a change in the broader trend,” Srivastava added.
Although growth sectors are preferred, there is potential for a short-term trade. “There are two ways to look at it. From a long-term perspective, when the broader market is moving higher and growth-oriented sectors are outperforming, you would not typically expect the FMCG sector to perform as strongly,” said Srivastava, adding, “however, if I look at the FMCG index and some of the individual stocks I have been tracking this morning, they are showing signs of near-term strength. The FMCG index bottomed out around 47,500 and has since recovered to around 49,000.”
“I believe there is a good trading opportunity here. On a one-month view, the FMCG index could potentially move towards 50,000-55,000. With that outlook, we would look to take long positions in the FMCG sector, purely from a one-month trading perspective,” he said.
Srivastava said investors are advised to remain cautious. IT remains in a “void” with no clear signs of a bottom and Metals are facing pressure due to the rising dollar.
On the IT sector he said, “The IT sector broadly remains in a viod phase. At best, if the broader market continues to move higher, the sector could see a technical bounce or a short-term trading rally. However, we do not see any meaningful signs of relief in IT stocks at this point. If you look at the Nifty IT index or even the global software index, both continue to weaken on a day-to-day basis. Therefore, we do not believe it is worth trying to pre-empt a bottom in the IT space. We continue to avoid the sector for now, as the risks remain tilted to the downside.”
Turning on to metals, Srivastava stated, “we are seeing some weakness in the metals sector. We will be watching for a potential bottom because the longer-term outlook for the sector remains positive. The current pressure is mainly due to the strengthening of the US dollar.”
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
