Weekly Market Outlook

Indian equity benchmarks ended the passing week in red terrain as traders remained concerned over rising Crude oil prices.

Continued selling by foreign institutional investors (FII) dented sentiments. Critical gauges started the week on a quiet note as traders remained concerned after the Reserve Bank statement that India’s foreign exchange reserves declined $867 million to $593.037 billion in the week ended September 15.

Traders took note of the report that S&P Global Ratings retained India’s growth forecast for the current fiscal at 6 per cent citing a slowing world economy, rising risk of subnormal monsoons and delayed effect of rate hike.

It sees the recent spike in vegetable price inflation as temporary but revised the full fiscal retail inflation forecast to 5.5 per cent, from 5 per cent earlier, on higher global oil prices.

Domestic indices traded in a tight band as traders continued to sell off risky assets as rising oil prices fueled fears of further inflationary pressures.

However, the downside remained capped as Chief Economic Advisor V Anantha Nageswaran said the inclusion of Indian government bonds in JP Morgan’s emerging market debt index is expected to broaden India’s investor base, potentially appreciate the rupee, and make it easier for Indian financial institutions to lend money.

Markets somehow managed to move northward during the week as traders took support from S&P Global Market Intelligence stating that Indian banks will continue attracting global investment from investors looking for better returns as credit growth, improved margins, and stable asset quality boost the country’s lenders.

Some support also came with the Global Trade Research Initiative’s (GTRI) statement that steps like streamlining port and customs operations and setting up a national trade network will help Indian firms integrate with global value chains and add $1.2 trillion to the country’s foreign trade by 2030.

But huge selling on the penultimate day of the week dragged the markets lower amid reports stating that India’s current account deficit (CAD) surged to $9.2 billion in the first quarter of 2023-24, more than seven times what it was in the preceding quarter.

However, buying on the final day of the week helped markets to recoup most of their weekly losses as traders opted to buy beaten-down but fundamentally strong stocks.

Meanwhile, India Ratings and Research (Ind-Ra) in its ‘September 2023 edition of its Credit Market Tracker report said that the tightness in the liquidity market is likely to ease meaningfully in the coming quarter, as the government spending has increased, followed by a further release of money from the incremental cash reserve ratio funds.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex decreased 180.74 points or 0.27% to 65,828.41 during the week ended September 29, 2023.

The BSE Midcap index gained 391.95 points or 1.23% to 32,340.71 and the small cap index surged 504.75 points or 1.36% to 37,562.23.

On the sectoral front, S&P BSE Information Technology was down by 928.20 points or 2.81% to 32,065.34, S&P BSE TECK was down by 335.52 points or 2.27% to 14,470.90, S&P BSE Consumer Durables was down by 591.39 points or 1.29% to 45,359.94 were the top losers.

S&P BSE Healthcare was up by 733.60 points or 2.64% to 28,497.52, S&P BSE Realty was up by 113.94 points or 2.54% to 4,605.93, S&P BSE Capital Goods was up by 1,009.25 points or 2.16% to 47,729.02, S&P BSE Metal was up by 490.37 points or 2.16% to 23,206.33 were the top gainers.

NSE movement for the week

The Nifty decreased 35.95 points or 0.18% to 19,638.30.

On the National Stock Exchange (NSE), Nifty IT was down by 1121.90 points or 3.41% to 31,784.40 and Nifty Next 50 was down by 139.35 points or 0.31% to 45,036.65

Nifty Mid Cap 100 increased 397.90 points or 0.99% to 40,537.05.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 39,569.91 crore and gross sales of Rs 44,173.29 crore, leading to a net outflow of Rs 4,603.38 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 3,864.88 crore against gross sales of Rs 3,221.07 crore, resulting in a net inflow of Rs 643.81 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 66.55 crore and gross sales of Rs 35.70 crore, leading to a net inflow of Rs 30.85 crore.

Outlook for the coming week

The coming week is going to be very crucial as it’s the start of the new month and there will be lots of macroeconomic data to guide the markets. Auto and cement stocks will be reacting to their monthly sales numbers at the start of the week.

Traders will be eyeing the S&P Global Manufacturing PMI data, which is scheduled to be released on October 03 and the S&P Global Composite PMI, and S&P Global Services PMI on October 05.

Besides, RBI Interest Rate Decision, Cash Reserve Ratio, Foreign Exchange Reserves, Bank Loan Growth and Deposit Growth data are scheduled to be released on September 06.

The 52nd meeting of the GST Council, chaired by the Union finance minister and comprising state ministers will be held on October 07, 2023, at Vigyan Bhawan, New Delhi. The council may take up the matter of reducing the GST rate on millet-based mixes to 5% or nil from 12% or 18% to promote millet consumption.

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with S&P Global Manufacturing PMI, ISM Manufacturing PMI, ISM Manufacturing Employment on October 02 followed by Redbook, JOLTs Job Openings on October 03.

S&P Global Services PMI Final, S&P Global Composite PMI, ISM Services PMI, ISM Services Employment, Factory Orders on October 04, Initial Jobless Claims, Balance of Trade on October 05, Unemployment Rate, Non-Farm Payrolls, Participation Rate, Baker Hughes Total Rig Count on October 06.









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