Nifty Outlook for July 13: Index recovery could be in jeopardy yet again as Hormuz shuts

The Nifty 50 ended a volatile trading week on a strong note, recovering from a sharp mid-week selloff as buyers returned to the market in the final session.

The benchmark index rose 244 points on Friday to settle at 24,206, after opening with a gap-up of 162 points and maintaining gains throughout the session. The close near the day’s high suggests renewed buying interest following Wednesday’s steep correction.

Last week began on a positive note, with the Nifty advancing during the first two trading sessions. However, the rally lost momentum near the 24,500 mark, where selling pressure emerged, triggering a correction of nearly 700 points from the week’s high. Friday’s rebound helped the index recover a significant portion of those losses.

Among the Nifty constituents, Jio Financial Services, HDFC Life Insurance and Adani Enterprises were the top gainers, while Dr. Reddy’s Laboratories, Eternal and Bharti Airtel ended among the biggest losers.

Realty, PSU Banks and Information Technology led the gains, while FMCG was the only major sector to close marginally lower.

The broader market continued to outperform the benchmark. The Nifty Midcap 100 gained 1.4% to scale a fresh record high, while the Nifty Smallcap 100 advanced 1.55% to end at a new 52-week high, indicating continued participation beyond large-cap stocks.

Looking ahead, the market’s recovery could come under pressure after the US military launched strikes on Iran following Tehran’s alleged attack on a container ship on Sunday. Iran also claimed it had once again closed the Strait of Hormuz, while several Gulf states reportedly came under attack.

What do analysts expect?

According to Nagaraj Shetti of HDFC Securities, the Nifty’s short-term trend remains positive despite the volatility witnessed during the week.

He expects the index to move towards the 24,500-24,600 zone over the coming sessions, while identifying 24,000 as the immediate support level.

Rupak De of LKP Securities also maintained a constructive view, saying the near-term bias continues to favour the bulls. He sees immediate resistance at 24,500, while 24,000 remains a key support level.

Hitesh Rathi of Angel One said the 24,000-23,930 zone will act as the first line of support, followed by a stronger base between 23,850 and 23,800. On the upside, resistance is seen in the 24,280-24,320 range, with the next hurdle placed between 24,480 and 24,540.

Nandish Shah of HDFC Securities noted that the Nifty held above its 50-day simple moving average of 23,829 throughout the week, reflecting sustained buying at lower levels.

He said the recent swing low of 23,805 and swing high of 24,530 will remain key technical levels to watch, while continued strength in mid- and small-cap stocks indicates healthy market participation.

Bank Nifty outlook

Bank Nifty also ended the week on a firm footing. The index opened with a gap-up, traded in a narrow range during the first half of the session and extended gains in the latter half to close 1.39% higher at 58,046.

According to Sudeep Shah of SBI Securities, the index faces immediate resistance in the 58,500-58,600 zone. A sustained move above this range could pave the way for an advance towards 59,000 and subsequently 59,500.

On the downside, the 57,600-57,500 zone is expected to provide immediate support.

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