Dalal Street bets on a strong July as macro risks begin to fade

Indian equities are expected to extend gains in July, with historical data showing the Nifty has ended the month in positive territory in eight of the past 10 years, delivering average gains of 3.1%. Analysts at Motilal Oswal and IIFL Capital Services see the Nifty potentially adding 500-700 points, or 2-3%, supported by easing crude oil prices at around $74 a barrel, a stabilizing rupee, and improving monsoon conditions. Mid-cap and small-cap stocks are expected to continue outperforming large caps, which face pressure from persistent FII selling and weakness in the IT sector.