Weekly Market Outlook

Indian equity benchmarks ended the passing week on fresh record highs as higher-than-expected gross domestic product (GDP) numbers and the better-than-expected US inflation data buoyed sentiment.

Markets started the week on a pessimistic note as traders were anxious with data released by the Reserve Bank of India (RBI) showing that India’s foreign exchange reserves declined to $616.10 billion as of February 16.

Some concern also came as the Ministry of Statistics and Programme Implementation (Mospi) stated that as many as 431 infrastructure projects, each entailing an investment of Rs 150 crore or above, were hit by cost overrun of more than Rs 4.80 trillion in January 2024.

However, key gauges managed to keep their head above water as traders supported Prime Minister Narendra Modi’s statement that the world no longer feels surprised at India’s achievements as it has become a new normal now and they today realize the benefit of walking alongside the country.

Markets once again lost momentum and started moving southward amid a private report stating that while it seems increasingly unlikely the US economy is headed for recession, small businesses still face headwinds like higher costs and difficulty retaining qualified workers.

Traders shrugged off Union Minister of Commerce and Industry Piyush Goyal’s statement that with the triple track of strong macroeconomic fundamentals, huge thrust in infrastructure creation and social welfare push India has been at the forefront of global growth for the past decade.

Traders also remained worried as the Department for Promotion of Industry and Internal Trade (DPIIT) in its latest data showed that foreign direct investment (FDI) inflows in India declined 13 per cent to $32.03 billion in April-December 2023, dragged down by lower infusion in computer hardware and software, telecom, auto, and pharma sectors.

FDI inflows stood at $36.74 billion during the corresponding nine months of the preceding fiscal. But key gauges witnessed a sharp rally on the penultimate day of the week and indices hit fresh all-time highs supported by impressive GDP data.

The GDP data showed the economy grew at 8.4 per cent in the December quarter amid robust manufacturing and construction. Growth in September-December was the highest in six quarters and more than the 6.6 per cent predicted by the street.

The growth estimate for this financial year was revised to 7.6 per cent from 7.3 per cent. Sentiments also remained buoyant as India’s manufacturing sector continued growth momentum in February, aided by growth in factory production and sales coupled with the strongest expansion in new export orders.

Markets eke out slender gains on Saturday’s special trading session taking support by a report that GST collections rose by 12.5 per cent to Rs 1.68 lakh crore in February 2024 compared to the year-ago period buoyed by an increase in domestic sales as well as imports.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 663.35 points or 0.91% to 73,806.15 during the week ended March 02, 2024.

The BSE Midcap index gained 28.38 points or 0.07% to 39,962.59, while the small-cap index slipped 180.99 points or 0.39% to 45,852.48.

On the sectoral front, S&P BSE Capital Goods was up by 2,422.90 points or 4.27% to 59,155.01, S&P BSE Metal was up by 902.60 points or 3.29% to 28,299.21, S&P BSE Consumer Durables was up by 1,420.69 points or 2.76% to 52,858.24.

S&P BSE Healthcare was down by 791.93 points or 2.22% to 34,960.51, and S&P BSE Information Technology was down by 339.70 points or 0.88% to 38,288.61 were the few losers on the BSE.

NSE movement for the week

The Nifty surged 165.70 points or 0.75% to 22,378.40.

On the National Stock Exchange (NSE), Bank Nifty was up by 485.75 points or 1.04% to 47,297.50 and Nifty Next 50 gained 629.95 points or 1.06% to 59,783.70, while Nifty IT was down by 439.85 points or 1.16% to 37,605.80 and Nifty Mid Cap 100 decreased 126.50 points or 0.26% to 49,153.05.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 115,247.91 crore and gross sales of Rs 109,083.88 crore, leading to a net inflow of Rs 6,164.03 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 8,373.30 crore against gross sales of Rs 4,677.11 crore, resulting in a net inflow of Rs 3,696.19 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 458.86 crore and gross sales of Rs 350.57 crore, leading to a net inflow of Rs 108.29 crore.

Outlook for the coming week

Indian markets ended the week with healthy gains amid strong domestic macroeconomic data. India’s Q3 GDP registered a higher-than-expected 8.4 per cent growth on the back of good performance by the sectors such as construction, mining & quarrying, and manufacturing. 

The coming week will be a holiday-shortened as markets will remain closed on March 08 on Mahashivratri.

Marketmen will be looking for the HSBC Services PMI data for February to be out on March 05 for more directional cues.

Investors will also be eyeing Foreign Exchange Reserves data. Foreign Exchange Reserves in India increased to $619070 million on February 23 from $616100 million in the previous week.

Besides, bank loan growth data and deposit growth data will be going to be out in the coming week. The value of loans in India increased 20.30 per cent year-on-year in the fortnight to February 9, 2024. 

On the global front, investors would be eyeing some important economic data from the world’s largest economy, the United States (US), starting with the Fed Harker Speech on March 04 followed by Redbook, S&P Global Composite PMI Final, S&P Global Services PMI Final, ISM Services PMI, Factory Orders, RCM/TIPP Economic Optimism Index on March 05.

Fed Chair Powell Testimony, JOLTs Job Openings on March 06, Balance of Trade, Initial Jobless Claims, Fed Chair Powell Testimony on March 07, Fed Williams Speech, Non-Farm Payrolls, Unemployment Rate, Baker Hughes Oil Rig Count on March 08.

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