July stock market trends: July to bring positive returns for Nifty indices amid easing geopolitical tensions

Mumbai: July may turn out to be the fifth consecutive month for benchmark indices to earn a positive return going by the historical trend. Data on monthly returns of indices over the past decade shows that Nifty 50 and Nifty 500 have gained in July on nine out of 10 instances. Additionally, analysts expect the benchmarks to move up this July as well and Nifty 50 may be on track to scale a new peak amid tapering geopolitical tensions and possibility of a normal monsoon.

According to the data from Motilal Oswal Financial Services, the Nifty 50 on an average has moved up 3.6% and Nifty 500 index is up 3.8% in the month of July between 2015 and 2024.

Even global indices have shown strong seasonality trends, as US benchmarks S&P 500 and Dow Jones have ended higher in July in each of the 10 years since 2015.

“July is one of the most consistent and profitable months on a seasonal basis, and stands out as the best-performing month in the entire calendar year,”said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. Taparia said currently, easing out in global tensions, stability in crude price, sustained buying from domestic institutions, sustained SIP Flow, short covering from foreign investors, better monsoon and expectation of better quarterly earnings are the reasons which could fuel the momentum on the upside.

According to Sriram Velayudhan, senior vice president, IIFL Capital Services, July has been a positive month for Indian equity markets, driven by the monsoon trigger which boosts sentiment. “Additionally, global seasonality trends in July also remain strong, which has a rub-off effect on Indian equities.”