Weekly Market Outlook

Indian equity benchmarks managed to end the passing week with half a per cent gain as the IMF raised India’s GDP forecast, though geopolitical tensions between Israel and Palestinians kept gains in check.

Markets made a negative start as traders remain concerned amid escalating geopolitical tensions in the Middle East and surging crude oil prices overseas.

Sentiments also remain dampened after the RBI data showed that India’s forex reserves dropped by $3.79 billion to $586.91 billion for the week ended September 29.

Traders paid no heed towards the Reserve Bank of India’s (RBI) bi-monthly consumer confidence survey (CCS) showing that consumer confidence for September reverted to its recovery path after a brief pause in the July 2023 round of the survey.

The next day, traders turned optimistic after the International Monetary Fund (IMF) raised its 2023-24 GDP growth forecast for India for the second time in three months, taking it closer to the 6.5 per cent predicted by Indian authorities.

Some support also came as the National Sample Survey Office (NSSO) data showed the unemployment rate for persons aged 15 years and above in urban areas declined to 6.6 per cent during April-June 2023 from 7.6 per cent a year ago.

The report said with the government trying to bring down the fiscal deficit and the likelihood of subsidy bills going up, public capex-which seems to have led to the uptick in real-investment growth recently came down.

Local bourses extended gains as traders took support from the Ministry of Finance stating that India’s gross direct tax collection increased by 17.95 per cent on the year to Rs 11.07 lakh crore in the period from April 1 to October 9.

However, selling in the final two days of the week ate some of their weekly gains as traders turned cautious after the International Monetary Fund’s Deputy Director, Fiscal Affairs Department, Ruud de Mooij said that India has a high debt like that of China. Still, the risks associated with it are not as significant as that of its northern neighbour.

Positive macro-economic data too failed to cheer markets on the final day India’s Consumer Price Index (CPI)-based inflation (retail inflation) eased to a three-month low of 5.02 per cent year-on-year in September from 6.83 per cent in August, with moderation in vegetables and fuel prices.

Besides, India’s industrial production growth rose to a 14-month high of 10.3 per cent in August with good performance by the manufacturing, mining and power sectors. Finally, markets managed to end the volatile week of trade with half a per cent gain.

BSE movement for the week

 The Bombay Stock Exchange (BSE) Sensex surged 287.11 points or 0.44% to 66,282.74 during the week ended October 13, 2023.

The BSE Midcap index gained 227.96 points or 0.71% to 32,305.62 and the small-cap index surged 324.25 points or 0.86% to 38,184.83.

On the sectoral front, S&P BSE Realty was up by 193.70 points or 4.13% to 4,889.12, S&P BSE Auto was up by 1,037.86 points or 2.86% to 37,271.32, S&P BSE Metal was up by 542.86 points or 2.40% to 23,197.69 were the top gainers.

S&P BSE Information Technology was down by 435.71 points or 1.33% to 32,207.95, S&P BSE TECK was down by 125.74 points or 0.86% to 14,550.34, S&P BSE Consumer Durables was down by 326.11 points or 0.70% to 46,202.73 were the top losers on the BSE sectoral front.

NSE movement for the week

The Nifty surged 97.55 points or 0.50% to 19,751.05.

On the National Stock Exchange (NSE), Nifty Mid Cap 100 was up 221.45 points or 0.55% to 40,506.15 and Nifty Next 50 was up by 339.90 points or 0.76% to 45,290.30.

On the other side, Bank Nifty was down by 72.65 points or 0.16% to 44,287.95 and Nifty IT was down by 533.75 points or 1.65% to 31,807.95.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in the equity segment in the week, with gross purchases of Rs 43,127.76 crore and gross sales of Rs 44,913.82 crore, leading to a net outflow of Rs 1,786.06 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 6,784.69 crore against gross sales of Rs 4,860.01 crore, resulting in a net inflow of Rs 1,924.68 crore.

In the hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 25.00 crore and gross sales of Rs 37.69 crore, leading to a net outflow of Rs 12.69 crore.

 Outlook for the coming week

In the passing week, key gauges witnessed a positive trend tracking positive macroeconomic data. India’s industrial output grew by 10.3 per cent in August. Also, India’s headline retail inflation rate fell to 5.02 per cent in September.

In economic releases, traders will be eyeing India’s wholesale prices index (WPI), slated to be released on October 16.

India’s wholesale prices shrank by 0.52 per cent year-on-year in August 2023, compared with market estimates of a 0.6 per cent decline after a 1.36 per cent drop in the prior month.

Foreign Exchange Reserves data, Bank Loan growth and Deposit growth data are scheduled to be released on October 20. Foreign Exchange Reserves in India decreased to $586910 million on September 29 from $590700 million in the previous week.

Investors will also keep an eye on some important quarterly numbers to be released next week. HDFC Bank, CEAT, Federal Bank, Bank of Maharashtra, Bajaj Finance, Happiest Minds Technologies, L&T Technology Services, Tata Elxsi, One 97 Communications, ICICI Bank, IDBI Bank, Kotak Mahindra Bank, Yes Bank would report their earnings in the coming week.

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with the NY Empire State Manufacturing Index, Fed Harker Speech on October 16 followed by Redbook, Industrial Production, and Manufacturing Production on October 17.

Building Permits Prel, Fed Beige Book on October 18, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Existing Home Sales on October 19 and finally Baker Hughes Oil Rig Count on October 20.

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