Weekly Market Wrap: Indian equity benchmarks closed the week with a gain of roughly three and a half percentage points, extending their winning streak to the sixth week in a row.
- SUMMARY
- During the week ending December 8, the BSE Sensex rose 2,344 points, or 3.47 percent, to 69,826 while the Nifty rose 702 points, or 3.46 percent, to 20,969.
- As many as 40 firms in the Nifty 50 index returned a profit to investors. Adani Ports emerged as the top gainer in the NIFTY pack with a weekly gain of 23.6%.
- Among sectors, the BSE Power index gained the most (13.1%) throughout the week. While the BSE Oil & Gas and BSE Bankex indices have gained 7.7 percent and 5.3 percent, respectively.
Indian equity benchmarks ended the week with a gain of around three and a half percentage points, owing to strong macroeconomic data, high expectations of a U.S. rate cut in March, and the ruling Bharatiya Janata Party’s victory in key state elections in Rajasthan, Chhattisgarh, and Madhya Pradesh.
On the macro level, GST receipts surged 15% to approximately Rs 1.68 lakh crore in November, owing to increased domestic activity and festive season shopping. The latest Reserve Bank of India (RBI) report showed that India’s foreign exchange reserves climbed by $2.54 billion to $597.94 billion for the week ending November 24.
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Furthermore, the RBI Monetary Policy Committee opted to maintain the repo rate at 6.50 percent. The BSE Sensex rose 2,344 points, or 3.47 percent, to 69,826 for the week ending December 8, while the Nifty rose 702 points, or 3.46 percent, to 20,969. Among sectors, the BSE Power index gained the most (13.1%) throughout the week. While the BSE Oil & Gas and BSE Bankex indices have gained 7.7 percent and 5.3 percent, respectively,. The BSE Healthcare index, on the other hand, fell 0.5%.
During the week, as many as 40 firms in the Nifty 50 index generated positive returns to investors. Adani Ports emerged as the index’s top gainer with a weekly gain of 23.6%. It was followed by Power Grid Corporation of India (8.7%), Bharat Petroleum Corporation (7.5%), State Bank of India (7.4%), and ICICI Bank (6.8%). HDFC Bank, NTPC, and Larsen & Toubro all increased by over 6%. Divi’s Laboratories, Hindustan Unilever, and HDFC Life Insurance Company, on the other hand, fell 2.9 percent, 1.6%, and 1.5 percent, respectively.
Market Wrap
According to Vinod Nair, Head of Research at Geojit Financial Services, the market reached an all-time high, fueled by strong domestic GDP growth. “Despite the RBI’s policy stance, an upgraded GDP growth forecast for FY24 (6.5 percent to 7%) boosted investor confidence.”Measures to resolve the liquidity imbalance, such as the reversal of SDF and MDF facilities, boosted financials, resulting in a 5% gain in Nifty Bank for the week. Because of valuation comfort, festive momentum, and a high increase in residential sales, the IT, consumer, car, and real estate sectors did strongly. Mid and small caps continued to outperform, owing to a positive economic outlook, robust Q2 results, and oil price adjustments.”
Investors should keep in mind that meeting the RBI’s 4% CPI inflation objective will take time. Reduced rabi sowing and dwindling reservoir levels raise concerns about a possible increase in food grain costs. This had a negative impact for FMCG equities, despite favorable performance in most other sectors.
What to expect the following week
The forthcoming data-heavy week will center on key releases such as inflation statistics from India and the United States. “Inflation in India is expected to rise, while inflation in the United States is expected to remain stable.” Indian industrial and manufacturing output is also predicted to rise, with the market expecting expansion. However, the outcome of the upcoming Fed policy meeting would be critical in determining market attitudes, according to Nair.
Technical Prognosis
According to Amol Athawale, Vice President of Technical Research at Kotak Securities, the benchmark indices have had a fantastic surge in the recent week, with the Nifty ending 3.47 percent higher and the Sensex rising over 2340 points. During the week, the Nifty/Sensex successfully broke through a significant resistance level of 20,200/68,000, and the subsequent positive momentum was amplified.
The index has created a long bullish candle on weekly charts, and it also has a higher bottom shape on daily and intraday charts, which is mostly good. The market texture is positive, and any significant pullback should be viewed as an opportunity to accumulate high-quality equities.
“For index traders right now, 20,800-20,700/69,250-69,000 would act as sacred support zones, while 21,200-21300/70000-70300 could be profit booking zones for short-term traders.”However, the upswing below 20,700/69,000 will be vulnerable,” Athawale warned. The short-term texture for Bank Nifty is optimistic. “For the bulls right now, 46,500-46,200 would be a critical support zone. If it maintains above that level, it might surge to 47,800-48,000, according to Athawale.
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