Weekly Market Outlook

Extending a gaining streak for five straight weeks, Indian equity benchmarks ended the holiday-shortened week with over two percentage points supported by better-than-expected GDP numbers and exit poll results.

Key gauges made an optimistic start to the week as traders took some support after S&P Global Ratings has raised India’s growth forecast for the current financial year (FY24) to 6.4 per cent, from 6 per cent, saying that robust domestic momentum has offset headwinds from high food inflation and weak exports.

However, it cut the growth estimates for the next fiscal (FY25) to 6.4 per cent, from 6.9 per cent, as it expects growth to slow on a higher base, subdued global growth and lagged impact of interest rate hike.

Some support also came in the markets as the commerce ministry is working to address issues related to non-tariff barriers and market access for domestic products in sub-Saharan African countries like Nigeria, Ethiopia, Ghana, and Gulf nations to boost India’s exports.

Local bourses extended gains as sentiments were supported by S&P Global Ratings’ report stating that India’s GDP growth rate will rise to 7 per cent by 2026 compared to 4.6 per cent for China.

It expects Asia-Pacific’s growth engine to shift from China to South and Southeast Asia. Sentiments remained upbeat with rating agency ICRA’s report stating that the credit metrics of India Inc. are likely to show slight sequential improvement in Q3 FY2024, with interest coverage increasing to 4.5-5.0 times in Q3 FY2024 from 4.5 times in Q2 FY2024.

The credit metrics would result from improved earnings of Corporate India, on the back of continuing, albeit moderating tailwinds from commodity prices and seasonally strong demand during the recently concluded festive season.

Sentiments continued to remain upbeat amid a private report stating that the market value of companies listed on the BSE crossed a record $4 trillion for the first time riding on the sustained rally in Indian equities.

The unemployment rate in the March quarter of the previous fiscal was 6.8 per cent, while it was 6.6 per cent in April-June. The rate was 7.2 per cent in the third quarter of the previous fiscal.

Buying on the final day of the week mainly helped markets to enlarge weekly gains as the Indian economy grew faster than expected in the September quarter. The surge in the index is attributed to the faster-than-expected Indian GDP growth in the September quarter.

The Indian economy expanded by 7.6%, surpassing the RBI’s estimate of 6.5%. The manufacturing sector mainly drove this growth. The results of the exit polls indicated a high possibility of political stability, too aided the sentiments.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 1511.15 points or 2.29% to 67,481.19 during the week ended December 01, 2023.

The BSE Midcap index gained 976.37 points or 2.90% to 34,586.76 and small-cap index surged 758.67 points or 1.91% to 40,565.96.

On the sectoral front, S&P BSE Oil & Gas was up by 1,129.21 points or 5.79% to 20,645.03, S&P BSE Power was up by 270.05 points or 5.71% to 4,998.07, S&P BSE PSU was up by 616.94 points or 4.71% to 13,719.71, S&P BSE Capital Goods was up by 1,794.63 points or 3.67% to 50,745.21 and S&P BSE Metal was up by 701.65 points or 2.95% to 24,500.09 were the top gainers, while there were no losers on the BSE.

NSE movement for the week

The Nifty surged 473.20 points or 2.39% to 20,267.90.

On the National Stock Exchange (NSE), Bank Nifty was up by 1045.10 points or 2.39% to 44,814.20, Nifty IT was up by 543.55 points or 1.70% to 32,598.70, Nifty Mid Cap 100 increased 1331.95 points or 3.17% to 43,382.40 and Nifty Next 50 increased 1878.65 points or 4.03% to 48,486.40.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 41,251.17 crore and gross sales of Rs 32,628.58 crore, leading to a net inflow of Rs 8,622.59 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 5,168.63 crore against gross sales of Rs 2,707.24 crore, resulting in a net inflow of Rs 2,461.39 crore.

In the hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 15.67 crore and gross sales of Rs 28.85 crore, leading to a net outflow of Rs 13.18 crore.

Outlook for the coming week

Indian markets ended higher for the fifth straight week with gains of over two per cent each, with Sensex and Nifty settling over 67,400 and 20,250 marks, respectively as the Indian economy grew 7.6 per cent during the July-September quarter of the current financial year 2023-24, remaining the fastest-growing major economy.

In the coming week, traders will be eyeing the S&P Global Composite PMI, and S&P Global Services PMI to be out on December 05.

The S&P Global India Composite PMI slipped to 58.4 in October 2023 from 61.0, pointing to the lowest reading since March amid slower increases in manufacturing output and services activity.

Also, the traders would be awaiting the Reserve Bank of India (RBI) interest rate decision, which will be announced on December 08. The Reserve Bank of India kept its benchmark policy repo at 6.5 per cent for the fourth consecutive meeting in October 2023, in line with market expectations.

On the global front, from the US traders will first be eyeing the Factory Orders on December 04, Redbook, S&P Global Composite PMI Final, S&P Global Services PMI Final, ISM Services PMI, ISM Services Employment, ISM Services Business Activity, ISM Services New Orders, ISM Services Prices on December 05.

Exports & Imports data on December 06, Initial Jobless Claims on December 07, Non-Farm Payrolls, Unemployment Rate, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count on December 08.





Leave a Reply

Your email address will not be published. Required fields are marked *