Weekly Market Outlook

Key gauges ended unchanged as selling on the final day of the week ate all of their initial weekly gains as traders opted to book initial profit ahead of macroeconomic data.

Indian equity benchmarks started the holiday truncated week on an optimistic note as the latest data by the Reserve Bank of India (RBI) showed that India’s foreign exchange reserves rose to a new high for the third straight week, reaching $645.58 billion in the week ended March 29. The total reserves rose by $2.95 billion in the previous week.

Some optimism also came as India Ratings and Research (Ind-Ra) has put out a report maintaining a neutral outlook on the finances of Indian states for the fiscal year 2024-2025 (FY25), showing States’ aggregate revenue deficit is projected to be 0.4 per cent of gross domestic product (GDP) for FY25, down from 0.5 per cent in FY24.

The buoyancy in sentiment continued, led by sectorial tailwinds and Q4 earnings growth expectations. On the very next day, local indices witnessed consolidation as traders turned cautious with the RBI’s Report stating that frequent weather shocks caused by climate change pose challenges for the monetary policy and downside risks to economic growth.

Domestic bourses once again got momentum and hit all-time highs with Sensex crossing 75,000 marks for the first time as traders took support with a private report that India is expected to see a normal monsoon in 2024, promising some respite after a prediction of more-than-normal heat wave days in the summer preceding the June-September rainy season.

Traders took note of the US National Security Advisor’s statement that the partnership between India and the United States has reached a new height with collaboration on technology and other fields. Traders overlooked a report by credit rating agency ICRA in which it has revised the banking sector outlook to Stable from Positive on the expectation of moderation in credit growth and profitability metrics. However, the same would continue to remain healthy.

Traders also paid no heed towards reports that the Indian Meteorological Department has predicted that in the April-June period, various parts of the country could record 10-20 heat wave days compared to the normal four to eight days.

But selling on the final day of the week mainly played spoilsport for the markets. It pulled markets back to the neutral lines as market participants avoided taking long positions ahead of the macro-economic data — Index of Industrial Production (IIP) and Consumer Price Index (CPI) — for more directional cues.

Traders remained cautious with a private report that India’s consumer price inflation likely eased to a five-month low of 4.91% in March but was still above the Reserve Bank of India’s 4% medium-term target as food price rises persist.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex decreased 3.32 points to 74,244.90 during the week ended April 12, 2024.

The BSE Midcap index gained 78.49 points or 0.19% to 40,909.03, while the small-cap index slipped 160.64 points or 0.35% to 45,872.07.

On the sectoral front, S&P BSE Consumer Durables was down by 472.47 points or 0.88% to 53,028.38, S&P BSE Healthcare was down by 284.02 points or 0.80% to 35,261.84, S&P BSE Information Technology was down by 282.92 points or 0.78% to 35,781.66, S&P BSE Fast Moving Consumer Goods was down by 86.92 points or 0.45% to 19,334.04 and S&P BSE Capital Goods was down by 217.23 points or 0.35% to 62,251.73 were the top losers.

S&P BSE Metal was up by 813.72 points or 2.76% to 30,348.42, S&P BSE Oil & Gas was up by 412.07 points or 1.48% to 28,245.21, S&P BSE Realty was up by 103.46 points or 1.40% to 7,496.45, S&P BSE Auto was up by 335.67 points or 0.68% to 49,732.34 and S&P BSE Consumer Discretionary Goods & Services was up by 53.13 points or 0.60% to 8,865.84 were the top gainers.

NSE movement for the week

The Nifty increased 5.70 points or 0.03% to 22,519.40.

On the National Stock Exchange (NSE), Bank Nifty was up by 71.50 points or 0.15% to 48,564.55, Nifty Mid Cap 100 increased 44.70 points or 0.09% to 50,067.55 and Nifty Next 50 gained 371.75 points or 0.59% to 63,067.85, while Nifty IT was down by 229.80 points or 0.65% to 35,018.10.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 58,290.39 crore and gross sales of Rs 44,618.36 crore, leading to a net inflow of Rs 13,672.03 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 5,922.14 crore against gross sales of Rs 5,614.98 crore, resulting in a net inflow of Rs 307.16 crore.

In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 210.70 crore and gross sales of Rs 181.82 crore, leading to a net inflow of Rs 28.88 crore.

Outlook for the coming week

Indian equity markets snapped the passing week on a flat note as traders were cautious ahead of India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the day. 

On the economic front, market participants would be eyeing the data of the Wholesale price index (WPI), which is scheduled to be released on April 15.

On the same day, import and export data are also scheduled to be released. India’s merchandise trade deficit widened to $18.7 billion in February 2024 from a $16.6 billion gap a year earlier and compared to market forecasts of an $18.3 billion shortfall.

Foreign Exchange Reserves, Monetary Policy Meeting Minutes, Deposit growth and Bank Loan growth data are scheduled to be released on April 19. 

The coming week will mainly be guided by earnings, as lots of important companies will be announcing their numbers. Crisil, ICICI Lombard General Insurance, Tata Communications, Bajaj Auto, HDFC Life Insurance Company, Infosys, Mastek, HDFC Asset Management Company, Jio Financial Services, Wipro, HDFC Bank etc. 

On the global front from the US, traders will first be eyeing the NY Empire State Manufacturing Index, Retail Sales, NAHB Housing Market Index on April 15, Fed Daly Speech, Building Permits Prel, Redbook, Industrial Production, and Manufacturing Production on April 16.

Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Fed Williams Speech, Existing Home Sales, Fed Bostic Speech on April 18, Fed Bostic Speech, Baker Hughes Total Rigs Count on April 19.

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