D-Street surged 2% in second straight week as both FIIs and DIIs turned buyers. What lies ahead?
The BSE Sensex surged 1,404 points, or 1.9 percent, to 75,410.4 during the week ended on May 24. The Nifty gained 455 points, or 2.02 percent, to 22,957. Sector-wise, the BSE Capital Goods index was top performer with a gain of 4.7 percent.
- May 25, 2024,
- Updated May 25, 2024 3:58 PM IST
Extending previous week’s rally, the Indian equity benchmarks ended with a gain of around two percentage points amid positive HSBC Flash India Manufacturing PMI data. The headline HSBC Flash India Composite Output Index, which measures the combined output of India's manufacturing and service sectors, rose from a final reading of 61.5 in April to 61.7 in May indicating the third-strongest rate of expansion in nearly 14 years.
The BSE Sensex surged 1,404 points, or 1.9 percent, to 75,410.4 during the week ended on May 24. The Nifty gained 455 points, or 2.02 percent, to 22,957. Sector-wise, the BSE Capital Goods index was top performer with a gain of 4.7 percent, followed by BSE Metal index (gain of 2.8 percent) and BSE Power (increase of 2.5 percent). On the other hand, the BSE Healthcare index declined by 0.6 percent during the week.
FII, DII investments
Data available from ACE Equity showed that in the current month DIIs have bought equity worth Rs 40,986 crore as of May 24. On the other hand, FIIs sold Rs 22,046 crore of equities in May so far. However, a change was noticed in their strategy last week when FIIs have again turned buyers and purchased Rs 6,195 crore of shares, while DIIs bought Rs 6,978 crore of equities.
Forty-two stocks in the Nifty 50 index delivered positive returns for investors last week. With a weekly gain of 6.8 percent, Coal India emerged as the top gainer in the index. It was followed by Cipla (up 5.8 percent), Adani Ports (5.8 percent) and Divi's Laboratories (5 percent). Larsen & Toubro, Eicher Motors, Tata Steel and BPCL also advanced by over 4 percent. On the other hand, Shree Cement, Sun Pharma, and Nestle India declined 3 percent, 2.9 percent and 1.4 percent, respectively.
Market macros
Vinod Nair, Head of Research at Geojit Financial Services, sees a continued hawkish stance on US policy rates, and expects a sustained momentum in the domestic market in the short term.
“Global market sentiments remained subdued as the recent US FOMC minutes suggest a continued hawkish stance on policy rates. US jobless claims fell more than expected, corporate profits remained healthy, and stubborn inflation persists, giving the Fed no reason to cut rates,” said Nair.
Meanwhile, the domestic market is reaching new highs, with large caps playing second fiddle to the broader market rally, indicating sustained momentum in the short term, he added. The BSE PSU index has experienced significant rerating due to strong performance and improved visibility, driven by PSU banks and defence stocks, Nair said.
Nifty outlook
According to Deepak Jasani, Head of Retail Research at HDFC Securities, “After making fresh highs above 23,000 in early trade, Nifty settled flat on May 24. At close, Nifty was down 0.05 percent or 10.6 points at 22957.1. Cash market volumes on the NSE were 7.7 percent lower compared to the previous day. The midcap index closed 0.23 percent higher even as the advance-decline ratio fell to 0.66:1. Shares mostly fell in Europe and Asia on Friday after unexpectedly strong reports on the US economy raised the possibility of interest rates staying high.”
“On the daily technical chart, Nifty formed a doji (118 points range) on May 24 after a big bull candle on the previous day. While on weekly charts, Nifty gained 2.02 percent - almost the same as in the previous week. The low of May 24 i.e. 22,908 should be protected on a closing basis for the rally to continue. Nifty could now face resistance at 23,175 while 22,794 could provide support in the near term,” Jasani said.
Bank Nifty
Neeraj Sharma, AVP Technical and Derivatives Research at Asit C Mehta Investment Intermediates said that the Bank Nifty index opened on a negative note, but after an initial dip, the index witnessed buying interest, which helped it to settle the day on a positive note at 48,972 levels.
“Technically, the Bank Nifty has broken the short-term resistance of 48,260 levels and managed to close above it, indicating strength. As long as the index holds above 48,000 levels, we expect it to test the levels of 49,500. Thus, a buy-on-dips approach should be adopted in Bank Nifty,” Sharma said.
Extending previous week’s rally, the Indian equity benchmarks ended with a gain of around two percentage points amid positive HSBC Flash India Manufacturing PMI data. The headline HSBC Flash India Composite Output Index, which measures the combined output of India's manufacturing and service sectors, rose from a final reading of 61.5 in April to 61.7 in May indicating the third-strongest rate of expansion in nearly 14 years.
The BSE Sensex surged 1,404 points, or 1.9 percent, to 75,410.4 during the week ended on May 24. The Nifty gained 455 points, or 2.02 percent, to 22,957. Sector-wise, the BSE Capital Goods index was top performer with a gain of 4.7 percent, followed by BSE Metal index (gain of 2.8 percent) and BSE Power (increase of 2.5 percent). On the other hand, the BSE Healthcare index declined by 0.6 percent during the week.
FII, DII investments
Data available from ACE Equity showed that in the current month DIIs have bought equity worth Rs 40,986 crore as of May 24. On the other hand, FIIs sold Rs 22,046 crore of equities in May so far. However, a change was noticed in their strategy last week when FIIs have again turned buyers and purchased Rs 6,195 crore of shares, while DIIs bought Rs 6,978 crore of equities.
Forty-two stocks in the Nifty 50 index delivered positive returns for investors last week. With a weekly gain of 6.8 percent, Coal India emerged as the top gainer in the index. It was followed by Cipla (up 5.8 percent), Adani Ports (5.8 percent) and Divi's Laboratories (5 percent). Larsen & Toubro, Eicher Motors, Tata Steel and BPCL also advanced by over 4 percent. On the other hand, Shree Cement, Sun Pharma, and Nestle India declined 3 percent, 2.9 percent and 1.4 percent, respectively.
Market macros
Vinod Nair, Head of Research at Geojit Financial Services, sees a continued hawkish stance on US policy rates, and expects a sustained momentum in the domestic market in the short term.
“Global market sentiments remained subdued as the recent US FOMC minutes suggest a continued hawkish stance on policy rates. US jobless claims fell more than expected, corporate profits remained healthy, and stubborn inflation persists, giving the Fed no reason to cut rates,” said Nair.
Meanwhile, the domestic market is reaching new highs, with large caps playing second fiddle to the broader market rally, indicating sustained momentum in the short term, he added. The BSE PSU index has experienced significant rerating due to strong performance and improved visibility, driven by PSU banks and defence stocks, Nair said.
Nifty outlook
According to Deepak Jasani, Head of Retail Research at HDFC Securities, “After making fresh highs above 23,000 in early trade, Nifty settled flat on May 24. At close, Nifty was down 0.05 percent or 10.6 points at 22957.1. Cash market volumes on the NSE were 7.7 percent lower compared to the previous day. The midcap index closed 0.23 percent higher even as the advance-decline ratio fell to 0.66:1. Shares mostly fell in Europe and Asia on Friday after unexpectedly strong reports on the US economy raised the possibility of interest rates staying high.”
“On the daily technical chart, Nifty formed a doji (118 points range) on May 24 after a big bull candle on the previous day. While on weekly charts, Nifty gained 2.02 percent - almost the same as in the previous week. The low of May 24 i.e. 22,908 should be protected on a closing basis for the rally to continue. Nifty could now face resistance at 23,175 while 22,794 could provide support in the near term,” Jasani said.
Bank Nifty
Neeraj Sharma, AVP Technical and Derivatives Research at Asit C Mehta Investment Intermediates said that the Bank Nifty index opened on a negative note, but after an initial dip, the index witnessed buying interest, which helped it to settle the day on a positive note at 48,972 levels.
“Technically, the Bank Nifty has broken the short-term resistance of 48,260 levels and managed to close above it, indicating strength. As long as the index holds above 48,000 levels, we expect it to test the levels of 49,500. Thus, a buy-on-dips approach should be adopted in Bank Nifty,” Sharma said.