Weekly Market Outlook

It turned out to be a fabulous week of trade for Indian equity benchmarks with frontline gauges ending at all-time highs, settling above their crucial 71,400 (Sensex) and 21,450 (Nifty) levels, backed by buying across sectors after the US Federal Reserve kept its key interest rate unchanged and signalled rate cuts next year.

Markets made an optimistic start of the week as sentiments got boosted by Union minister Piyush Goyal’s statement that India is aiming to achieve the $2 trillion export target by 2030 and in the process, it is moving this industry out of the government support to make it self-sustaining and cost competitive.

However, markets trimmed gains as traders turned cautious with data showing that India’s retail inflation based on the Consumer Price Index (CPI) rose to a three-month high of 5.55 per cent in November 2023 on firming food prices, including vegetables and cereals. Though it remains within the Reserve Bank of India’s (RBI’s) comfort zone of less than 6 per cent.

Traders also got anxious with data showing that India’s inflation based on the wholesale price index (WPI) rose 0.26 per cent in November from a year ago driven by the increase in prices of food articles, electricity, computer, electronics & optical products, motor vehicles, other transport equipment and other manufacturing etc. In October, the WPI inflation was -0.52 per cent.

But markets regained traction and rallied sharply to scale a new peak, as traders found some solace with better-than-expected growth in the October Industrial Production data. India’s industrial production hit a 16-month high in October, aided by a favourable base effect.

Some optimism also came with a report that net direct tax collection in the eight months of the current fiscal touched 58.34 per cent of Budget Estimates (BE) at Rs 10.64 lakh crore. The Ministry of Finance said the net tax collection for April-November stood at Rs 10.64 lakh crore, which is 23.4 per cent higher than the corresponding period of last year.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 1658.15 points or 2.37% to 71,483.75 during the week ended December 15, 2023.

The BSE Midcap index gained 907.44 points or 2.57% to 36,198.35 and the small-cap index surged 978.84 points or 2.38% to 42,083.21.

On the sectoral front, S&P BSE Information Technology was up by 2,374.77 points or 6.98% to 36,375.03, S&P BSE TECK was up by 851.19 points or 5.61% to 16,012.61, S&P BSE PSU was up by 663.54 points or 4.56% to 15,213.91, S&P BSE Metal was up by 1,109.64 points or 4.49% to 25,845.94 and S&P BSE Realty was up by 207.08 points or 3.54% to 6,060.59 were the top gainers, while S&P BSE Consumer Durables was down by 194.44 points or 0.40% to 48555.09 was the only loser on the BSE.

NSE movement for the week

The Nifty surged 487.25 points or 2.32% to 21,456.65.

On the National Stock Exchange (NSE), Bank Nifty was up by 881.55 points or 1.87% to 48,143.55, Nifty IT was up by 2389.55 points or 7.16% to 35,782.45, Nifty Mid Cap 100 gained 1186.35 points or 2.67% to 45,586.55 and Nifty Next 50 gained 1348.60 points or 2.66% to 51,957.35.

 FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 87,606.32 crore and gross sales of Rs 71,378.25 crore, leading to a net inflow of Rs 16,228.07 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 6,657.46 crore against gross sales of Rs 3,226.92 crore, resulting in a net inflow of Rs 3,430.54 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 384.91 crore and gross sales of Rs 276.40 crore, leading to a net inflow of Rs 108.51 crore.

Outlook for the coming week

Indian equity markets ended in green for a seventh consecutive week with better-than-expected growth in the October Industrial Production data. India’s industrial production hit a 16-month high in October, aided by a favourable base effect.

In the coming week, market participants will be eyeing Foreign Exchange Reserves data to be out on December 22 for further cues. Foreign Exchange Reserves in India increased to $604040 million on December 1 from $597940 million in the previous week.

Besides, traders will be looking for Monetary Policy Meeting Minutes to be out on December 22. The Reserve Bank of India held its benchmark policy repo at 6.5 per cent for the fifth consecutive meeting in December 2023 to ensure inflation stays within the central bank’s 2-6% target range while supporting growth.

On the global front, investors would be eyeing few economic data from the world’s largest economy, the United States (US), starting with the NAHB Housing Market Index on December 18 followed by Building Permits Prel, Redbook on December 19, Current Account, CB Consumer Confidence on December 20.

GDP Growth Rate, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Kansas Fed Composite Index, Kansas Fed Manufacturing Index on December 21, Core PCE Price Index, Durable Goods Orders, Personal Income, Personal Spending, Durable Goods Orders, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count and Building Permits Final on December 22.




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