Weekly Market Outlook

Markets extend gaining streak for a fourth straight week; eke out a slender gain

Indian equity benchmarks extended their gaining streak for the fourth straight week and eked out marginal gain during the passing week. Gains remained capped as traders remained on the sidelines ahead of the Assembly election’s outcomes to be announced in the first week of December. Markets started the week on a quiet note as traders remained cautious with S&P Global Ratings’ statement that the hike in risk weights for consumer loans like personal loans and credit cards may shave off tier I capital of banks by 60 basis points, hit loan growth, and squeeze the nonbank sector in particular. Sentiments also remained downbeat with the Reserve Bank’s statement that India’s forex kitty decreased by $462 million to $590.321 billion for the week ended November 10. In the previous reporting week, the reserves had increased by $4.672 billion to $590.783 billion. Sentiments remained positive with a private report stating that India Inc’s net profit as a percentage of the country’s gross domestic product (GDP) is just shy of reaching 5 per cent, bolstered by strong earnings growth in the second quarter of 2023-24. Traders overlooked data showing that retail inflation for agricultural labourers and rural workers rose marginally to 7.08 per cent and 6.92 per cent in October, respectively, from 6.70 per cent and 6.55 per cent respectively in September 2023 due to higher prices of certain food items. Market participants took support with the report that the Ministry of Finance (FinMin) is expecting to conclude the full financial year as projected with a strong growth performance and macroeconomic stability even as it flagged risks of demand taking a hit on fuller transmission of monetary policy, high inflation, and uncertain external financial flows. India has projected a gross domestic product (GDP) growth of 6.5 per cent for FY24.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 175.31 points or 0.27% to 65,970.04 during the week ended November 24, 2023. The BSE Midcap index gained 229.81 points or 0.69% to 33,610.39 and the Small-cap index surged 208.66 points or 0.53% to 39,807.29. On the sectoral front, S&P BSE Realty was up by 81.46 points or 1.48% to 5,571.48, and S&P BSE Power was up by 66.47 points or 1.43% to 4,728.02. S&P BSE Information Technology was down by 112.64 points or 0.34% to 32,706.83, and S&P BSE Capital Goods was down by 164.89 points or 0.34% to 48,950.58.

NSE movement for the week

The Nifty surged 62.90 points or 0.32% to 19,794.70. On the National Stock Exchange (NSE), Bank Nifty was up by 185.15 points or 0.42% to 43,769.10 and Nifty Mid Cap 100 was up by 239.20 points or 0.57% to 42,050.45. On the other side, Nifty IT was down by 136.15 points or 0.42% to 32,055.15 and Nifty Next 50 was down by 230.50 points or 0.49% to 46,607.75.

Industry and Economy

Expressing optimism over India’s export growth, the PHD Chamber of Commerce and Industry (PHDCCI) in its latest report has said that measures like comprehensive trade pacts, reduction in the cost of capital, power, and land reforms will help boost the country’s exports of goods and services to $2 trillion by 2030. The report also recommended schemes for 75 potential export products including marine items, iron ore, some chemicals, pharma, cotton, aluminium, and tankers to promote shipments. It said ‘the 75 products have been identified from nine most promising sectors. These products contribute around $222 billion, which is around 50 per cent of India’s total exports. At the global level, these 75 products have a significant presence in world exports, whereas India’s share of these products is only 6 per cent of the total world exports.

Top Gainers

Hero Moto Corp up by 8.19% was the top gainer on Nifty for the week – Hero Moto Corp gained traction after its best-ever festive season sales in 2023. It recorded the highest-ever festive sales, clocking more than 14 lakh (1.4 million) units in retail sales during the 32-day festive period – between the first day of the Navratras and Bhai Dooj this year. Riding on robust demand across rural markets as well as steady retail off-take in key urban centres, the Company registered a 19% growth over the previous year and surpassed its previous highest retail of 12.7 lakh units which was recorded in the festive period of 2019.

Bajaj Auto up by 6.83% was another top gainer on Nifty for the week – Bajaj Auto traded higher as its CEO reportedly said that Bajaj Auto’s electric scooter — Chetak has made significant strides in the market, almost tripling its market share in just five months.

Top Losers

Oil and Natural Gas Corporation (ONGC) down by 6.42% was the top loser of the week on Nifty – The upstream companies like ONGC witnessed selling pressure as US crude oil prices remained under pressure during the week on expectations that OPEC+ might not deepen output cuts next year after the producer group postponed its policy meeting. the OPEC and allies including Russia delayed a ministerial meeting at which they were expected to discuss oil output cuts to November 30.

Bajaj Finance down by 4.64% was another top loser of the week on Nifty – Bajaj Finance came under pressure as it temporarily suspended the issuance of Existing Member Identification cards (EMI cards) to new customers till such time that the deficiencies observed by the Reserve Bank of India (RBI) are rectified to their satisfaction. The Company continues to offer financing to new and existing customers at dealer stores in the normal course of business.

Outlook for the coming week

Indian equity markets ended in green for a fourth consecutive week as investors remained hopeful that the Federal Reserve has come to the end of its interest rate hiking cycle.

On the economy front, market participants would be eyeing the data of Gross Domestic Product (GDP) growth rate data, Government Budget Value and Infrastructure Output, which is scheduled to be released on November 30. Also, the coming week is going to be the start of a new month and both cement and auto stocks would be buzzing on reporting monthly sales figures.

On the global front, investors will be eyeing macro-economic reports from world’s largest economy, United States, starting with Dallas Fed Manufacturing Index, Building Permits Final on November 27, followed by Redbook, CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments, Richmond Fed Services Index, Dallas Fed Services Index, Dallas Fed Services Revenues Index on November 28, GDP Growth Rate, Goods Trade Balance, Retail Inventories Ex Autos, Wholesale Inventories on November 29.

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