Weekly Market Outlook

Extending a winning streak for the fourth straight session, Indian equity benchmarks ended the holiday-shortened week with fresh record highs.

Markets started the week slightly in green as traders took support with a report that Global rating agency Moody’s has raised India’s growth forecast for 2024 calendar year to 6.8 per cent, from 6.1 per cent estimated earlier, on the back of ‘stronger-than-expected’ economic data of 2023 and fading global economic headwinds.

Some support also came from Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) member Ashima Goyal’s statement that the Indian economy has done well despite multiple external shocks. Still, counter-cyclical macroeconomic policy measures will be required to aid the economy’s natural resilience as the geopolitical situation remains fragile.

On the very next day, key gauges witnessed a selloff as traders turned cautious after Paul Gruenwald, Global Chief Economist at S&P Global Ratings, stated that the global economic growth is likely to surprise on the upside and hence he sees only modest headwinds for India next fiscal.

Sentiments remain dented on a report that India’s services sector activity slowed in February but remained comfortably above the neutral mark of 50.0 and signalled a sharp rate of expansion that was well above the series history (since December 2005), as positive demand trends supported sales and business activity.

However, buying on the penultimate session of the holiday truncated week mainly helped markets to end in green terrain. Sentiments turned optimistic amid Care Edge Ratings’ report that bad loans of banks in India have reached record lows due to recoveries from defaulters and regularisation of payments many-fold.

Traders also took note of the Ministry of Agriculture & Farmers Welfare’s latest report stating that the enrolment under the Pradhan Mantri Fasal Bima Yojana (PMFBY) increased by 27% in the current year so far. Also, it said that 42% of total farmers insured under the scheme in FY 2023-24 are non-loanee farmers.

Markets witnessed consolidation on the final day of the week as traders remained largely on the sidelines ahead of major macro-economic data — Index of Industrial Production (IIP) and Consumer Price Index (CPI).

Traders remained little optimistic after RBI Governor Shaktikanta Das said the Indian economy is likely to grow more than the National Statistical Office (NSO) estimate of 7.6 per cent in the current financial year (FY24) and it could be close to 8 per cent.

Some support also came in amid reports that to attract foreign investments and showcase India’s burgeoning opportunities, the government has prepared a strategy to step up outreach to foreign investors.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 313.24 points or 0.42% to 74,119.39 during the week ended March 07, 2024.

The BSE Midcap index lost 109.74 points or 0.27% to 39,852.85, while the small-cap index slipped 1198.91 points or 2.61% to 44,653.57.

On the sectoral front, S&P BSE PSU was up by 369.77 points or 1.97% to 19,184.00, S&P BSE Power was up by 124.86 points or 1.86% to 6,829.45, S&P BSE Metal was up by 438.00 points or 1.55% to 28,737.21, S&P BSE BANKEX was up by 662.99 points or 1.23% to 54,394.38 were the top gainers, while S&P BSE Information Technology was down by 544.37 points or 1.42% to 37,744.24, S&P BSE Realty was down by 69.67 points or 0.95% to 7,235.84 was the top losers on the BSE.

NSE movement for the week

The Nifty surged 115.15 points or 0.51% to 22,493.55.

On the National Stock Exchange (NSE), Bank Nifty was up by 538.30 points or 1.14% to 47,835.80 and Nifty Next 50 gained 540.20 points or 0.90% to 60,323.90, while Nifty IT was down by 505.90 points or 1.35% to 37,099.90 and Nifty Mid Cap 100 was down 186.90 points or 0.38% to 48,966.15.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 66,387.33 crore and gross sales of Rs 58,765.20 crore, leading to a net inflow of Rs 7,622.13 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 6,973.76 crore against gross sales of Rs 3,523.64 crore, resulting in a net inflow of Rs 3,450.12 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 163.64 crore and gross sales of Rs 108.26 crore, leading to a net inflow of Rs 55.38 crore.

Outlook for the coming week

In the passing week, markets ended with gains as global rating agency Moody’s has raised India’s Gross Domestic Product (GDP) growth forecast for 2024 calendar year to 6.8 per cent, from 6.1 per cent estimated earlier, on the back of ‘stronger-than-expected’ economic data of 2023 and fading global economic headwinds.

In the coming week, traders will be looking for the major macro-economic data starting with the Index of industrial production (IIP) for the month of January to be out on March 12. On the same day, the Consumer Price Index (CPI) for the month of February is also going to be out.

The Wholesale Price Index (WPI) data for the month of February will be released on March 14. Market participants will be looking for the Balance of Trade (Exports and Imports) data, which is slated to be released on March 15.

On the global front, investors would be eyeing few economic data from world’s largest economy, United States (US), starting with Consumer Inflation Expectations on March 11, Inflation Rate or CPI, Redbook on March 12, Producer prices data, Initial Jobless Claims on March 14.

Import- export data, NY Empire State Manufacturing Index, Industrial Production, Manufacturing Production, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count on March 15.

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