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Index likely to move towards 25000 as key index heavyweights (representing 33% of Nifty weight) report earnings this weekend

ICICIdirect Research 18 Jul 2026 DISCLAIMER

The Nifty 50 has exhibited a strong short-squeeze move by aggressive institutional repositioning. Foreign Institutional Investors (FIIs) have become net buyers since mid-June, pumping over 25k crores back into domestic equities. Remarkably, despite escalated US-Iran tensions and supply disruptions in the Strait of Hormuz, no major foreign selling materialized recently, highlighting the likely change in their bias.
Simultaneously, the global weakening of the AI trade prompted a significant capital rotation out of overextended global AI stocks, benefiting India and other emerging markets. It might be the trigger behind intense short-covering over the last few sessions.
Post quarterly results, there has been noteworthy short covering seen among Technology stocks which has reverted ~10% from lows. The support provided by IT space may be amplified by banking and energy heavyweights which may take Nifty higher as markets have been has been oscillating in 1500 points range (24600-23100) for past 3 months.
After hitting All-Time High Midcap index seen minor profit booking, down 1%.

Key monitorable that may drive the ongoing up move:

  • After two months hiatus, the large cap stocks are showing early signs of revival. Over the weekend, key index heavyweights (representing 33% of Nifty weight) are likely to come out with Q1 earnings. Any positive triggers from earnings would fuel the next leg of up move
  • Bank Nifty is resuming uptrend after forming a higher base above its April swing high of 57500 that bodes well for extension of up move towards 60000 levels 
  • The AI/Semiconductor induced rally in North Asian markets (Kospi, Nikkei, Taiwan) is now showing sign of exhaustion, resulting into extended profit booking. Conversely, this rotation could benefit growth-oriented economies like India. 
  • During the Russia-Ukraine war (CY22-23) Brent crude oil corrected ~50% and subsequently staged a 34% pullback before entering a consolidation phase. In the current scenario, we expect similar stabilization process to pan out as after May-June correction (40%), brent crude has already seen ~25% rally from recent low of $70. Stabilization of crude from hereon would eventually provide much need cushion to equities

 

 

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