Weekly Market Wrap: D-Street rebound after Fed rate pause, positive macros. What lies ahead?
Indian equity markets ended the week with a gain of nearly 1 per cent each as the US Fed held rates steady with a less hawkish monetary policy stance.
- Nov 4, 2023,
- Updated Nov 4, 2023 12:56 PM IST
Indian equity benchmarks logged weekly gains after witnessing two continuous weeks of decline as the Fed held rates steady with a less hawkish monetary policy stance. Buying in the final two days of the week helped markets to garner decent gains for the week.
In the domestic market, sentiments turned upbeat after the Reserve Bank of India (RBI) data showed India’s services trade surplus bounced back in the September quarter of 2023-24 (FY24), growing 26.6 per cent after falling to a three-quarter low in June. Besides India's goods and services tax (GST) collections in October grew 13 per cent over a year earlier to Rs 1.72 lakh crore. The average gross monthly GST collection in FY 2023-24 now stands at Rs1.66 lakh crore; 11 per cent higher year on year.
These signals led the BSE Sensex to surge 581 points, or 0.91 per cent, at 64,364 during the week ended on November 03, while the Nifty jumped 183 points, or 0.96 per cent, to 19,231. Sector-wise, the BSE Realty index surged the most (10.4 per cent) during the week gone by. While BSE Oil & Gas and BSE Healthcare indices have registered a gain of 3.6 per cent, and 1.8 per cent, respectively. On the other hand, the BSE Auto index has registered a weekly decline of 0.7 per cent.
As many as 34 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 8 per cent, Bharat Petroleum Corporation emerged as the top gainer in the index. It was followed by Apollo Hospitals (6.7 per cent), Titan Company (4.9 per cent), and Hindalco Industries (4.1 per cent). Ultratech Cement, and State Bank of India also advanced by over three per cent. On the other hand, Mahindra & Mahindra, Maruti Suzuki India, and Dr. Reddy's Laboratories declined 2.8 per cent, 2.7 per cent, and 2.3 per cent, respectively.
Market Macros
Vinod Nair, Head of Research at Geojit Financial Services said, “The market exhibited a cautious tone at the outset, influenced by the uncertainty surrounding the US Fed's policy meeting. However, as the week progressed, the apprehension dissipated, and market sentiments rebounded. This turnaround was partly attributed to a modest decline in oil prices, which raised optimism about a potential pause in Fed actions.
He added that the market also received a boost from stable domestic macroeconomic PMI and robust corporate earnings from domestic companies. These positive factors helped the market recover from its initial losses during the week. Notably, the auto sector faced challenges despite positive auto sales figures, while the mid and small-cap sectors demonstrated noteworthy performance, driven by strong demand and strong economic outlook.
In the coming week, Investors will closely scrutinize the economic data from the US, including the PMI and nonfarm payroll releases, to gain further insights into US economic performance. The corporate earnings outlook for H1 has been favourable, and expectations for a positive H2 earnings outlook are high. “A positive performance in H2 could lead to potential earnings upgrades. Next week, the market is anticipating results from major PSU banks, auto, and metal sectors with an optimistic outlook”, Nair said.
Technical Outlook
Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, the upside momentum continued in the market for the second consecutive session on Friday and the Nifty closed the day higher by 97 points amidst range movement. A small negative candle was formed on the daily chart with a gap-up opening and minor upper and lower shadows. Technically, such formations are considered as a high wave type candle pattern.
Normally, such market action indicates a confusing state of mind among market participants at the highs.
He added Nifty is currently placed at the edge of strong overhead resistance around 19200-19300 levels as per the change in polarity principle. Still, there is no confirmation of any decisive upside breakout of the hurdle. “Nifty on the weekly chart formed a reasonable positive candle after the formation of a long negative candle last week. The short-term trend of Nifty remains positive, having shown range-bound movement near the crucial hurdles, there is a possibility of further consolidation or minor weakness in the short term before surging through the hurdle. Immediate support is at 19150”, Shetti said.
Also read: Adani Power shares up 25% in 7 sessions; what's next: Rs 360 or Rs 430?
Indian equity benchmarks logged weekly gains after witnessing two continuous weeks of decline as the Fed held rates steady with a less hawkish monetary policy stance. Buying in the final two days of the week helped markets to garner decent gains for the week.
In the domestic market, sentiments turned upbeat after the Reserve Bank of India (RBI) data showed India’s services trade surplus bounced back in the September quarter of 2023-24 (FY24), growing 26.6 per cent after falling to a three-quarter low in June. Besides India's goods and services tax (GST) collections in October grew 13 per cent over a year earlier to Rs 1.72 lakh crore. The average gross monthly GST collection in FY 2023-24 now stands at Rs1.66 lakh crore; 11 per cent higher year on year.
These signals led the BSE Sensex to surge 581 points, or 0.91 per cent, at 64,364 during the week ended on November 03, while the Nifty jumped 183 points, or 0.96 per cent, to 19,231. Sector-wise, the BSE Realty index surged the most (10.4 per cent) during the week gone by. While BSE Oil & Gas and BSE Healthcare indices have registered a gain of 3.6 per cent, and 1.8 per cent, respectively. On the other hand, the BSE Auto index has registered a weekly decline of 0.7 per cent.
As many as 34 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 8 per cent, Bharat Petroleum Corporation emerged as the top gainer in the index. It was followed by Apollo Hospitals (6.7 per cent), Titan Company (4.9 per cent), and Hindalco Industries (4.1 per cent). Ultratech Cement, and State Bank of India also advanced by over three per cent. On the other hand, Mahindra & Mahindra, Maruti Suzuki India, and Dr. Reddy's Laboratories declined 2.8 per cent, 2.7 per cent, and 2.3 per cent, respectively.
Market Macros
Vinod Nair, Head of Research at Geojit Financial Services said, “The market exhibited a cautious tone at the outset, influenced by the uncertainty surrounding the US Fed's policy meeting. However, as the week progressed, the apprehension dissipated, and market sentiments rebounded. This turnaround was partly attributed to a modest decline in oil prices, which raised optimism about a potential pause in Fed actions.
He added that the market also received a boost from stable domestic macroeconomic PMI and robust corporate earnings from domestic companies. These positive factors helped the market recover from its initial losses during the week. Notably, the auto sector faced challenges despite positive auto sales figures, while the mid and small-cap sectors demonstrated noteworthy performance, driven by strong demand and strong economic outlook.
In the coming week, Investors will closely scrutinize the economic data from the US, including the PMI and nonfarm payroll releases, to gain further insights into US economic performance. The corporate earnings outlook for H1 has been favourable, and expectations for a positive H2 earnings outlook are high. “A positive performance in H2 could lead to potential earnings upgrades. Next week, the market is anticipating results from major PSU banks, auto, and metal sectors with an optimistic outlook”, Nair said.
Technical Outlook
Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, the upside momentum continued in the market for the second consecutive session on Friday and the Nifty closed the day higher by 97 points amidst range movement. A small negative candle was formed on the daily chart with a gap-up opening and minor upper and lower shadows. Technically, such formations are considered as a high wave type candle pattern.
Normally, such market action indicates a confusing state of mind among market participants at the highs.
He added Nifty is currently placed at the edge of strong overhead resistance around 19200-19300 levels as per the change in polarity principle. Still, there is no confirmation of any decisive upside breakout of the hurdle. “Nifty on the weekly chart formed a reasonable positive candle after the formation of a long negative candle last week. The short-term trend of Nifty remains positive, having shown range-bound movement near the crucial hurdles, there is a possibility of further consolidation or minor weakness in the short term before surging through the hurdle. Immediate support is at 19150”, Shetti said.
Also read: Adani Power shares up 25% in 7 sessions; what's next: Rs 360 or Rs 430?