Weekly Market Outlook

Bears strengthened their grip over Dalal Street with frontline gauges tumbling two and a half per cent during the passing week as traders continued to remain worried over the Israel-Hamas conflict which created an environment of uncertainty and put pressure on global stock markets.

Rising US Treasury yields dampened sentiments as 10-year US Treasury yield had retraced from 16-year higher levels and had come down below 5 per cent levels.

Markets made a pessimistic start to the holiday truncated week as Crude oil quoting above the $90 a barrel mark plays spoil sports for the markets.

Sentiments also remain dampened by the statement of Shashanka Bhide, one of the three external members of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), that trade-related measures to improve domestic supply can help cool down food inflation only in the short run.

Markets extended their southward journey after a study by rating agency Crisil found that higher growth in vegetable demand relative to supply in the recent past has led to an upward trend in inflation, with spikes becoming more frequent. It said vegetable inflation has been the most volatile in the food category, in fact. Traders

Traders overlooked S&P Global Market Intelligence’s latest issue of PMI stating that India, the world’s fifth-largest economy in the world, is likely to overtake Japan to become the world’s third-largest economy with a GDP of $7.3 trillion by 2030.

Selling continued during the week as sentiments remained downbeat with a private report stating that Indian consumer spending during this year’s festival season will be slightly better than in 2022, but probably not enough to ramp up the speed of what is already the world’s fastest-growing major economy.

Investors overlooked the report that investment in the Indian capital markets through participatory notes rose over a six-year high at Rs 1.33 lakh crore in September-end, making it the seventh consecutive monthly increase, on the back of robust macroeconomic fundamentals.

However, buying on the final day of the week helped markets to pare some losses as traders took some comfort after Israel heeded to US’s request to delay its Gaza invasion to make time to negotiate hostage releases and keep humanitarian aid flowing into Gaza.

Some support also came with a report that India’s G20 Sherpa Amitabh Kant has said that the country is poised to become a $5 trillion economy. He added that the government has pushed the limit on infrastructure.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 1614.82 points or 2.47% to 63,782.80 during the week ended October 27, 2023.

The BSE Midcap index lost 768.35 points or 2.41% to 31,112.51, while the small-cap index slipped 1310.69 points or 3.43% to 36,888.03.

On the sectoral front, S&P BSE Realty was down by 154.88 points or 3.24% to 4,622.08, S&P BSE Oil & Gas was down by 530.12 points or 2.85% to 18,055.68, S&P BSE Consumer Durables was down by 1,439.34 points or 3.16% to 44,049.49, S&P BSE Power was down by 67.17 points or 1.50% to 4,404.87 and S&P BSE Capital Goods was down by 1,446.29 points or 3.06% to 45,766.82 were the top losers on the BSE, while there were no gainers on the BSE.

NSE movement for the week

The Nifty slipped 495.40 points or 2.53% to 19,047.25.

On the National Stock Exchange (NSE), Bank Nifty was down by 941.05 points or 2.15% to 42,782.00, Nifty IT was down by 869.65 points or 2.76% to 30,599.70, Nifty Mid Cap 100 decreased 1176.90 points or 2.95% to 38,701.85 and Nifty Next 50 decreased 710.15 points or 1.59% to 43,837.50.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in the equity segment in the week, with gross purchases of Rs 32,310.58 crore and gross sales of Rs 34,124.31 crore, leading to a net outflow of Rs 1,813.73 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 1,212.66 crore against gross sales of Rs 703.30 crore, resulting in a net inflow of Rs 509.36 crore.

In the hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 34.18 crore and gross sales of Rs 55.76 crore, leading to a net outflow of Rs 21.58 crore.

Outlook for the coming week

In the passing week, Indian equity markets ended with losses of over two per cent each as uncertainties associated with the Israel-Hamas conflict continued to weigh on markets.

The coming week is also going to be the start of a new month and both cement and auto stocks will be buzzing on reporting monthly sales figures. Marketmen will be waiting for India’s fiscal deficit data scheduled to be released on October 31.

On November 01, S&P Global Manufacturing PMI is going to be released. S&P Global Composite PMI, S&P Global Services PMI, Bank Loan growth and Deposit growth are scheduled to be released on November 03.

In the coming week, markets will also be tracking a slew of earnings from the industry’s big wigs, like Adani Green Energy, DLF, Marico, Procter & Gamble Hygiene & Health Care, TVS Motor Company, Bharti Airtel, Gail (India), Gravita India, Indian Oil Corporation, Jindal Steel and Power, Larsen and Toubro and many more teams.

On the global front, investors will be eyeing macro-economic reports from the world’s largest economy, the United States, starting with the Dallas Fed Manufacturing Index on October 30 followed by Redbook, Chicago PMI, Dallas Fed Services Index on October 31, S&P Global Manufacturing PMI Final, ISM Manufacturing PMI, ISM Manufacturing Employment, Fed Interest Rate Decision on November 01.

Fed Press Conference, Initial Jobless Claims, Nonfarm Productivity, Unit Labour Costs, Factory Orders on November 02, Non-Farm Payrolls, Unemployment Rate, Participation Rate, Government Payrolls, Manufacturing Payrolls, S&P Global Composite PMI Final, S&P Global Services PMI Final, ISM Services PMI, Baker Hughes Oil Rig Count on November 03.





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