Weekly Market Wrap: D-Street plunged amid escalating Middle East crisis and rising crude. What lies ahead?
Indian equity markets ended the week with losses of over a percent amid escalating tensions between Israel and Palestine and the subsequent rise in oil prices.
- Oct 21, 2023,
- Updated Oct 21, 2023 1:58 PM IST
Indian equity markets ended the week with losses of over a percent amid escalating tensions between Israel and Palestine and the subsequent rise in oil prices. Besides, a disappointing set of Q2 numbers from IT companies too dampened sentiments. Selling pressure also increased due to a report that India's merchandise exports saw a fall of 2.6 per cent year on year, contracting to $34.47 billion in September. The fall was also significantly reflected in imports, which contracted by 15 per cent to $53.84 billion in September 2023 against September 2022.
These signals led the BSE Sensex to fall 885 points, or 1.34 per cent, at 65,397.6 during the week ended on October 20, while the Nifty slipped 208 points, or 1.06 per cent, to 19,542.6. Sector-wise, the BSE Realty index declined the most (2.3 per cent) during the week gone by. While BSE Oil & Gas and BSE Power indices have registered a loss of 1.9 per cent, and 1.5 per cent, respectively. On the other hand, the BSE Auto index with a weekly gain of 0.5 per cent was the only sectoral benchmark that remained in the green.
As many as 16 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 8.6 per cent, Bajaj Auto emerged as the top gainer in the index. It was followed by Hero MotoCorp (3.5 per cent), SBI Life Insurance (3.4 per cent), Nestle India (3.1 per cent), and Cipla (2.7 per cent). HDFC Life Insurance and Dr. Reddy's Laboratories also advanced by over two per cent. On the other hand, Divi's Laboratories, Wipro, and Bajaj Finance declined 4.7 per cent, 4.6 per cent, and 3.5 per cent, respectively.
Market Macros:
Vinod Nair, Head of Research at Geojit Financial Services said, “Middle East tensions and elevated US bond yields steered the market to a consolidation path this week. A weak start to the earnings season, disappointment from the IT sector, and a mixed bag of results from banks influenced investors to book profits from the table”.
He added that FIIs continued to withdraw funds as the US Fed Chair emphasised the imperative for continued monetary tightening policy and holding interest rates high. Investors are likely to remain cautious in the near term due to concerns about the long-term implications of geopolitical tensions in the Middle East.
“We expect volatility to persist, although long-term investors will find bargain-hunting opportunities due to an optimistic Q2 FY24 earnings estimate and a festival-driven demand environment”. Weak ahead, market participants will vigilantly monitor US GDP data for insights into the Fed's interest rate trajectory. Additionally, as the earnings season gains momentum, investor sentiment will be shaped by corporate’s management commentary and bottom-up investment approach, Nair said.
Technical Outlook:
Rupak De, Senior Technical analyst at LKP Securities said that the benchmark Nifty recently experienced a significant decline, falling below the 50-day moving average (50DMA). The current trend appears to be negative, with immediate support situated at 19,500. “A further decline below this level could potentially lead the index towards the range of 19,150 to 19,000.
On the upside, the zone between 19,600 and 19,650 is expected to act as a strong resistance. A move above 19,650 could trigger short covering in the market." De said.
Also Watch: Stocks that saw big block deals this week: Zomato, HDFC Bank, IndiGo, Cipla, Jio Financial and more
Also Watch: Top stocks of the week: FACT, Bajaj Auto, Nestle India, LTIMindtree, ICICI Lombard and more
Indian equity markets ended the week with losses of over a percent amid escalating tensions between Israel and Palestine and the subsequent rise in oil prices. Besides, a disappointing set of Q2 numbers from IT companies too dampened sentiments. Selling pressure also increased due to a report that India's merchandise exports saw a fall of 2.6 per cent year on year, contracting to $34.47 billion in September. The fall was also significantly reflected in imports, which contracted by 15 per cent to $53.84 billion in September 2023 against September 2022.
These signals led the BSE Sensex to fall 885 points, or 1.34 per cent, at 65,397.6 during the week ended on October 20, while the Nifty slipped 208 points, or 1.06 per cent, to 19,542.6. Sector-wise, the BSE Realty index declined the most (2.3 per cent) during the week gone by. While BSE Oil & Gas and BSE Power indices have registered a loss of 1.9 per cent, and 1.5 per cent, respectively. On the other hand, the BSE Auto index with a weekly gain of 0.5 per cent was the only sectoral benchmark that remained in the green.
As many as 16 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 8.6 per cent, Bajaj Auto emerged as the top gainer in the index. It was followed by Hero MotoCorp (3.5 per cent), SBI Life Insurance (3.4 per cent), Nestle India (3.1 per cent), and Cipla (2.7 per cent). HDFC Life Insurance and Dr. Reddy's Laboratories also advanced by over two per cent. On the other hand, Divi's Laboratories, Wipro, and Bajaj Finance declined 4.7 per cent, 4.6 per cent, and 3.5 per cent, respectively.
Market Macros:
Vinod Nair, Head of Research at Geojit Financial Services said, “Middle East tensions and elevated US bond yields steered the market to a consolidation path this week. A weak start to the earnings season, disappointment from the IT sector, and a mixed bag of results from banks influenced investors to book profits from the table”.
He added that FIIs continued to withdraw funds as the US Fed Chair emphasised the imperative for continued monetary tightening policy and holding interest rates high. Investors are likely to remain cautious in the near term due to concerns about the long-term implications of geopolitical tensions in the Middle East.
“We expect volatility to persist, although long-term investors will find bargain-hunting opportunities due to an optimistic Q2 FY24 earnings estimate and a festival-driven demand environment”. Weak ahead, market participants will vigilantly monitor US GDP data for insights into the Fed's interest rate trajectory. Additionally, as the earnings season gains momentum, investor sentiment will be shaped by corporate’s management commentary and bottom-up investment approach, Nair said.
Technical Outlook:
Rupak De, Senior Technical analyst at LKP Securities said that the benchmark Nifty recently experienced a significant decline, falling below the 50-day moving average (50DMA). The current trend appears to be negative, with immediate support situated at 19,500. “A further decline below this level could potentially lead the index towards the range of 19,150 to 19,000.
On the upside, the zone between 19,600 and 19,650 is expected to act as a strong resistance. A move above 19,650 could trigger short covering in the market." De said.
Also Watch: Stocks that saw big block deals this week: Zomato, HDFC Bank, IndiGo, Cipla, Jio Financial and more
Also Watch: Top stocks of the week: FACT, Bajaj Auto, Nestle India, LTIMindtree, ICICI Lombard and more