Weekly Market Outlook

Indian equity benchmarks ended the passing week with a gain of around a percentage point on the back of tensions in the Middle East eased, coupled with strong quarterly earnings from companies.

Markets started the week on an optimistic note as traders reacted positively to the report that India’s net direct tax collections surged by 17.7 per cent year-on-year to Rs 19.58 lakh crore in the fiscal year ended March 2024 and exceeded the revised estimates by Rs 13,000 crore.

Adding more optimism among traders, Union Finance Minister Nirmala Sitharaman said that the Centre has tailored policies to make India an attractive destination for manufacturing and services, and the aim was to produce not just for the domestic market but for exports as well.

Some support also came after Employees’ Provident Fund Organization (EPFO) in its latest ‘Provisional payroll data’ report showed that 15.48 lakh net members have been added in the month of February 2024. The data further indicated that around 7.78 lakh new members have been enrolled during February 2024.

Traders also took some support with Union Minister Piyush Goyal’s statement that the Modi government has provided a corruption-free regime in the last 10 years and the country in the next few years will become the world’s third-largest economy.

Sentiments remained positive with a survey showing that India’s business activity expanded at its fastest pace in nearly 14 years in the month of April thanks to robust demand. It also showed easing input inflation and positive job growth. That suggests India is well placed to remain the fastest-growing major economy this year after posting strong expansion over the past few quarters.

HSBC’s flash India Composite Purchasing Managers’ Index INPMCF=ECI, compiled by S&P Global, rose to 62.2 this month from March’s final reading of 61.8. The reading has been consistently above the 50-mark separating expansion from contraction since August 2021.

Markets extended their northward journey taking support from RBI Monetary Policy Committee (MPC) member Shashanka Bhide’s statement that sustaining the economic growth momentum of 7 per cent in 2024-25 and beyond is feasible on the back of favourable monsoon, higher farm productivity and improved global trade.

Sentiments remained positive with the Comprehensive Economic Partnership Agreement (CEPA) Council Director Ahmed Aljneibi’s statement that the trade between India and UAE increased by 15 per cent since the implementation of the free trade agreement in May 2022 and both are on track to surpass the target of $100 billion in non-oil trade by 2030.

However, traders booked some of their weekly gains on the final day of the trade amid report that the World Bank said that interest rates could remain higher than expected in 2024 and 2025 as global commodity prices level off.

Traders were cautious amid reports that India’s central bank plans to soon change guidelines to permit banks to temporarily freeze accounts suspected of being used to commit cyber-crimes, as it battles a rising wave of online crime.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex surged 641.83 points or 0.88% to 73,730.16 during the week ended April 26, 2024.

The BSE Midcap index gained 1583.25 points or 3.96% to 41,587.77 and Small Cap index surged 1805.5 points or 3.97% to 47,239.29.

On the sectoral front, S&P BSE PSU was up by 1,016.95 points or 5.41% to 19,808.82, S&P BSE Consumer Durables was up by 2,612.31 points or 4.99% to 54,995.94, S&P BSE Realty was up by 320.82 points or 4.40% to 7,608.31, S&P BSE Metal was up by 1,150.72 points or 3.80% to 31,394.57 and S&P BSE Capital Goods was up by 2,079.66 points or 3.41% to 63,115.05 were the top gainers, while there were no losers on the BSE.

NSE movement for the week

The Nifty surged 272.95 points or 1.23% to 22,419.95.

On the National Stock Exchange (NSE), Bank Nifty was up by 626.90 points or 1.32% to 48,201.05, Nifty IT was up by 297.90 points or 0.89% to 33,666.20, Nifty Mid Cap 100 increased 1927.15 points or 3.96% to 50,624.10 and Nifty Next 50 increased 2246.65 points or 3.63% to 64,134.55.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 76,306.16 crore and gross sales of Rs 75,851.26 crore, leading to a net inflow of Rs 454.90 crore.

They also stood as net sellers in the debt segment with gross purchases of Rs 7,189.41 crore against gross sales of Rs 11,655.28 crore, resulting in a net outflow of Rs 4,465.87 crore.

In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 167.79 crore and gross sales of Rs 148.29 crore, leading to a net inflow of Rs 19.50 crore.

Outlook for the coming week

The passing week turned optimistic one for Indian equity markets amid positive data from HSBC Flash India Composite PMI.

In the coming holiday truncated week, which marks the start of the new month, market participants will be watching out for Infrastructure output, scheduled to be released on April 30. Infrastructure output in India increased 6.7% year-on-year in February 2024, following an upwardly revised 4.1% rise in January.

Stock markets would be shut for trade on May 1 on account of Maharashtra Day. On May 02, investors will be eyeing HSBC Manufacturing PMI Final data. Bank loan growth, Deposit growth and Foreign Exchange Reserves data are to be out on May 03.

In the ongoing result season, traders will be eyeing the earnings of prominent companies, including Tata Chemicals, UltraTech Cement, Havells India, Indian Oil Corporation, Adani Power, Ambuja Cements, Adani Enterprises, Adani Ports, Blue Star, Coal India, Dabur India, Adani Green Energy, Godrej Properties, MRF, Titan Company, Kotak Mahindra Bank etc. 

On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting from the Dallas Fed Manufacturing Index on April 29, Redbook, Chicago PMI, CB Consumer Confidence, Dallas Fed Services Index on April 30.

S&P Global Manufacturing PMI, ISM Manufacturing PMI, JOLTs Job Openings, ISM Manufacturing Employment, ISM Manufacturing New Orders, Fed Interest Rate Decision on May 01, Fed Press Conference, Balance of Trade, Initial Jobless Claims on May 02.

Non-Farm Payrolls, Unemployment Rate, Government Payrolls, S&P Global Composite PMI Final, S&P Global Services PMI Final, ISM Services PMI, ISM Services Business Activity, ISM Services Employment, Baker Hughes Oil Rig Count on May 03, Fed Goolsbee Speech and Fed Williams Speech on May 04.

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