Key market triggers to watch in July: Union budget, earning season, and more

Indian markets have been on the run since the election result. NIFTY50 and SENSEX have made substantial gains, surging over 7% so far this month. With election results out, investors are now looking forward to other key triggers that could impact markets in the coming month.

July 2024 is a month lined up with many major events that can have a substantial impact on the stock market. The events can pull the trigger on both bull and bear investors, and many are waiting to see how the market moves ahead next month.

Here are the several key triggers that market participants will be eagerly monitoring:

Upcoming Union budget for 2024-25

Union Budget 2024 is the most awaited event of July. While the dates have not been confirmed, reports had earlier claimed that the session would begin in the third week of July. Market participants will be closely monitoring tax regulations, policy reforms, and other key parameters during the forthcoming budget.

According to experts, the union budget will be a major event for the markets, as expectations and reactions could influence various sectors and market dynamics. President Droupadi Murmu said the upcoming Union Budget 2024-25 will be futuristic and speed up reforms.

Monsoon progression

Another major event for the market is how the Southwest monsoon season progresses throughout the country. Monsoon season has a significant influence on the agriculture sector and the broader economy.

Agriculture is important for India’s economic growth— as much as 44% of the country depends on it, and it accounts for 14% of the country’s GDP. A normal or above-normal monsoon is crucial to control food inflation and boost rural consumption.

According to the India Meteorological Department (IMD), India has received 20% below-normal rainfall during June until now, despite the forecast that the monsoon this year will be above normal.

Key economic data

Investors will look forward to key economic data that could influence the market dynamics. Domestic inflation numbers, which will be announced on 12 July, will be closely monitored. In addition to this manufacturing and service PMI data, WPI inflation numbers could be a major driving factor for the markets.

Besides domestic markets, investors will keep track of US economic data, which could influence the global markets. US core CPI data to be announced on 11 July will be important as it will help the US Federal Reserve make decisions on interest rate cuts.

The upcoming US election is another important event for the global markets. Although the election will be in November 2024, any policy changes in the run-up to it could influence fund inflow from foreign institutional Investors (FII).

Q1FY25 earning season

Major companies will release their results for the first quarter of the financial year 2024-25 (Q1 FY25) in July. Earning season will kickstart in the second week of July, with tier-1 IT companies like TCS, Infosys, Wipro, and HCL Tech announcing their Q1 results. According to experts, June quarter earnings will give further direction to the markets, which are currently hovering at record highs.

Conclusion

Based on the above events, July seems to be action-packed for the stock market. Each of these triggers has the potential to significantly impact the market. Hence, investors should trade and invest cautiously.