Weekly Market Wrap: D-Street witnessed fireworks amid positive global macros. What lies ahead?

Dalal Street witnessed fireworks during Diwali week as upbeat macroeconomic data boosted investors’ sentiment. Indian gauges ushered into the new Hindu calendar year -- Samvat 2080 -- on a bullish note with frontline gauges adding nearly one and a half percent each during the week.  

India's retail inflation based on Consumer Price Index (CPI) eased for the second consecutive month to a four-month low of 4.87 per cent in October 2023, in line with cooling prices of food items while wholesale price inflation remained in the negative territory for the seventh month in a row in October at (-) 0.52 per cent. Besides India's merchandise exports rose by 6.21 per cent to $33.57 billion in October 2023.  

These signals led the BSE Sensex to surge 890 points, or 1.37 per cent, at 65,794.7 during the week ended on November 17, while the Nifty jumped 306 points, or 1.58 per cent, to 19,731.8. Sector-wise, the BSE Information Technology index surged the most (5.0 per cent) during the week gone by. While BSE Realty and BSE Auto indices have registered a gain of 4.8 per cent, and 3.8 per cent, respectively. On the other hand, the BSE Bankex index has registered a weekly decline of 0.8 per cent.   

As many as 42 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 9.1 per cent, Eicher Motors emerged as the top gainer in the index. It was followed by Hero MotoCorp (7.6 per cent), Coal India (6.7 per cent), Tech Mahindra (5.8 per cent), and TCS (5.1 per cent). Infosys, Tata Motors, Bajaj Auto, Wipro, and HCL Technologies also advanced by over four per cent. On the other hand, Axis Bank, Bajaj Finance, and State Bank of India declined 3.3 per cent, 3.0 per cent, and 2.8 per cent, respectively.    

Market Macros     

Vinod Nair, Head of Research at Geojit Financial Services said, “The domestic markets ended the week on a positive note, buoyed by global cues and favourable Indian macroeconomic indicators hinting at controlled inflation.   Softer-than-expected inflation figures in the US, UK, and at home bolstered investor optimism, fueling hopes for an end to the interest rate cycle. This sentiment propelled gains across the broader market, particularly in small and mid-cap stocks.   
He added that the Confidence in export-oriented sectors like IT and Pharma resurged, anticipating increased spending, while the auto and real estate sectors gained favour during the festival season. However, towards the week's end, banking stocks were impacted by the RBI's decision to raise risk weights for unsecured loans. “Despite this, the market is anticipated to maintain its positive momentum in the short term, supported by declining oil prices and moderating US yields”, Nair said.   

Technical Outlook     

Rupak De, Senior Technical analyst at LKP Securities said that the Nifty has largely traded within a range, showing a predominantly bullish sentiment. Over the past two to three days, a 'buy on dips' approach has been loved by the street since the Nifty crossed the crucial 19,500 mark. “The trend is expected to stay positive as the Nifty consistently concludes trading sessions above the critical moving averages. Support levels are situated at 19,630/19,500 on the lower end, while resistance is placed at 19,850/ 20,000 on the higher end”, De said.  

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