As the week progressed, Indian stock markets reached new all-time highs amid volatile trading days. Market analysts predict that stock-specific movements will gain momentum due to the ongoing earnings season. Last week, benchmark indices surged, culminating in a new high on Friday, driven by a moderation in US inflation, better-than-expected results from TCS, and the absence of negative market fundamentals.

Vinod Nair, Head of Research at Geojit Financial Services, noted: "We anticipate stock-specific movements to intensify during the earnings season, particularly in the IT sector due to a positive start in earnings and outlook. The favorable monsoon progress and expectations of increased volumes have boosted FMCG stocks. In the coming week, investors will closely monitor economic data from China, the EuroZone, and the US for market momentum cues."

The Sensex and Nifty have accumulated returns of 11-13% so far in 2024-25, supported by strong purchases from both foreign and domestic institutional investors. The Sensex closed 0.8% higher at 80,519 points, while the Nifty rose by the same percentage to 24,502 points. Sectoral indices showed mixed results on Friday.

The Indian stock market will be closed on July 17 for Muharram. Market observers expect the upcoming budget session, starting from July 23, to provide additional incentives, including investments and capital expenditures in sectors like railways, defence, shipbuilding, power financing, and industry.

Krishna Appala, Sr. Research Analyst at Capitalmind Research, stated: "As the budget session nears, the market is hopeful that the government will continue to prioritize infrastructure, defence, railways, and green energy. Currently, the market does not anticipate any negative surprises, such as changes in income tax, LTCG, STCG, or STT, which could have a short-term negative impact."

Market participants will closely watch the policy decisions of the new government. Joseph Thomas, Head of Research at Emkay Wealth Management, commented on the trend of profit booking contributing to market volatility: "The current phase of volatility is expected to continue as profit booking may persist ahead of the Budget, which will offer more clarity on policy continuity."

Ajit Mishra, SVP of Research at Religare Broking Ltd., advised a cautious approach: "Traders should maintain a 'buy on dips' strategy, focusing on stock selection and trade management. Additionally, participants should monitor global indices, particularly the US markets, for cues."

As companies begin to disclose their first-quarter results, specific sectoral stocks are hitting new highs. The IT sector saw a 4% rally following TCS's inline results. "The IT sector is likely to remain in focus as other major IT companies release their results. On Monday, market reactions will hinge on India's inflation data, to be released post-market. Key results next week include Jio Financials, HDFC Life, Asian Paints, LTI Mindtree, Infosys, Havells, Wipro, JSW Steel, and Paytm. Globally, investors will also watch China's Q2 GDP numbers, US Core Retail Sales data, and ECB interest rate decisions," said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd.