Markets consolidated in a narrow range and ended marginally higher, taking a breather after the recent rally. After the muted start, the benchmarks tried to regain strength in the following sessions but mixed signals from the global front and divergence among the heavyweights limited the move.
On the weekly front, the BSE benchmark climbed 175.31 points or 0.26 percent, and the Nifty advanced 62.9 points or 0.31 percent. The more domestically focused small caps lost 0.39 percent this week, no longer outperforming the blue chips. Small and mid caps have gained 42% and 33% respectively so far in 2023, outpacing a 9.33% rise in Nifty 50.
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On Friday, Sensex and Nifty 50 ended flat weighed by slippage in information technology (IT) and fast moving consumer goods (FMCG) amid mixed global signals. The 30-share BSE Sensex ended lower by 47.77 points or 0.07 percent at 65,970.04 level on November 24 while the Nifty 50 closed at 19,794.70 level, down 7.30 points or 0.04 percent.
Despite the lack of significant movements, the Nifty 50 managed to extend its weekly winning streak, closing just below the 19,800 mark. The Nifty 50 settled above 19,600 levels in every session since November 14, but faced resistance at 19,800-19,900 levels. On the broader market, the Nifty Midcap 100 closed flat, while the Nifty Smallcap 100 closed 0.30 percent higher than the benchmark indices.
Vinod Nair, Head of Research at Geojit Financial Services said, ”The broader market experienced some profit booking as investor attention shifted to the mainstream market, marked by a spate of IPOs in the week. Sectors such as consumer goods and real estate took the lead, driven by a strong rebound in festive demand. However, the IT sector showed weak performance in response to weak global data. Despite the RBI’s scrutiny on unsecured loans of NBFCs, the banking index has shown resilience this week.”
Ahead, a busy week awaits the main market after the initial public offers (IPOs) that opened last week across the main board and the small and medium enterprises (SME) segments are all set to move to allocation stages. The week will be decisive from the technical point of view as investors will be closely watching the political developments for exit poll results along with domestic economic data.
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Overall, analysts expect volatility to remain high due to the scheduled expiration of November derivatives contracts, but expect the benchmark Nifty 50 to break above the 19,850 mark in the coming holiday-shortened week. A week ago, the final two sessions are expected to bring dynamic movement in markets over key domestic triggers.
Here are the key triggers for stock markets in the coming week:
Macro Data, Exit Surveys, Auto Sales:
On the macroeconomic front, India’s gross domestic product (GDP) for the third quarter will be released on November 30, 2023. The infrastructure outputs for October will be released on the same day. The S&P Global Services PMI for November will be declared on December 1st.
Car supplies will be in focus as car companies will announce their monthly car sales numbers for November on December 1, 2023. This will be crucial in relation to Diwali sales figures.
This week stock markets may experience some direction and increased volatility ahead of the November month F&O expiration – on Thursday, according to analysts. On November 30, exit polls for the state elections will also be revealed, which is likely to affect market movement on Friday. Liquidity is tied up in primary markets due to the recent surge in IPOs.
Foreign Direct Investment in India also fell 7.3 percent in the July-September quarter to $9.54 billion due to a sharp drop in inflows into computer software and hardware, trade and construction.
”Foreign direct equity investments in India have experienced a significant decline, registering a 24 percent decline to $20.5 billion during the first half of the financial year 2023-24,” noted Arvinder Singh Nanda, Senior Vice President, Master Capital Services. Ltd.
5 new IPOs, 2 listings to hit D-Street:
In the SME segment, five new IPOs will open for subscription in the coming week, and two companies will be listed. Swashthik Plascon IPO will close on November 29.
Deepak Chemtex IPO and AMIC Forging IPO open on November 29 while Net Avenue Technologies IPO, Graphisads IPO and Marinetrans India IPO will open for bidding on November 30.
Shares of Arrowhead Seperation Engineering IPO will be listed on BSE SME on November 28, while Rockingdeals Circular Economy IPO will be listed on NSE SME on November 30.
FII Activity:
Foreign institutional investors dumped in Indian stocks for three days last week and invested in the final two sessions. Foreign portfolio investors (FPIs) finally reversed their selling streak this month, after emerging as net sellers in August, September and October.
FPIs bought ₹378 crore of Indian stocks and the total inflow stands ₹13,673 crore as on November 24, taking into account debt, hybrid, debt-VRR and equities, according to National Securities Depository Ltd (NSDL) data.
FPIs were net buyers till November 15, but reversed the selling trend and invested on November 15 and 16. During August, September-October and till November 15, FPIs cumulatively sold shares for ₹83,422 crore through the exchanges.
”US bond yields have fallen sharply with the benchmark 10-year bond yield correcting from 5 percent in mid-October to 4.40 percent now. This forced the FIIs to slow down their selling. Importantly, they were buyers for four days this month with a large purchase of ₹2,625 crore on Friday, the 24th,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global Directions:
The market will report on US building permit data, US new home sales data, US GDP data, crude oil inventories, US Core PCE price index, US PMI data and Eurozone core CPI data. Crude oil prices will be keenly watched by investors as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will announce their decision on oil production policy on November 30.
”While global signals are relatively muted, market participants will closely monitor movements in crude oil prices, US bond yields and the dollar index,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The US Federal Reserve adopted a cautious stance and the bearish trend in European and German markets was also echoed in domestic markets. Declining inflation and recent cooling jobs in the US, along with easing US bond yields, have attracted foreign funds to the emerging market.
”We are closely watching the performance of the US markets for indications and indications are in favor of the prevailing upward movement to continue. We expect the Dow Jones Industrial Average (DJIA) to come close to the previous swing ie 35,679 and the 34,800-35,000 zone will limit the downside in case of any profit taking,” said Ajit Mishra, SVP – Technical Research, Religare Broking. Ltd.
Oil Prices:
Oil prices fell in the previous session after the release of some hostages in Gaza reduced the geopolitical risk premium, but prices posted their first week of gains in more than a month ahead of the OPEC+ production policy decision.
Brent crude futures settled 84 cents, or 1 percent, at $80.58 a barrel, while U.S. West Texas Intermediate crude fell $1.56, or 2 percent, from Wednesday’s close at $75.54, according to Reuters news agency.
Both contracts had their first weekly gain in five weeks as OPEC+ prepares for its meeting, which will have output cuts high on the agenda. The OPEC+ group surprised the market last week by postponing its November 26 to November 30.
This came after the oil producers struggled to reach a consensus on output levels. The surprise delay initially sent Brent futures down as much as 4 percent and WTI by 5 percent on Wednesday.
Corporate Activity:
Shares of three companies including Milkfood Ltd, Veeram Securities and Talbros Automative Components Ltd among others will trade ex-dividend in the coming week, starting Tuesday November 28. Additionally, SAPC shares will declare a rights issue of equity shares and Alphalogic. Industries Ltd will trade ex-bono in the coming week. Check full list here
Technical View:
Analysts saw a temporary correction in the Nifty and eyed a possible break above 19,850 next week, which would help the index inch towards a fresh high.
”On the downside, we expect the 19,350-19,550 zone to offer support if profit-taking deepens. Although the banking index is also trying to regain its lost ground, we suggest to focus on the other sectors for long trades until it decisively regains the 44,100 mark,” said Ajit Mishra of Religare Brokings.
”We may see a marginal fall in the broader indices, but the tone is likely to remain positive, so traders can use the dip to selectively add quality names from the mid-cap and small-cap basket as well,” Mishra added.
Sentiment is expected to remain on the sidelines as it holds above 19,700. However, a fall below 19,600 could exert downward pressure on the Nifty, according to Arvinder Singh Nanda of Master Capital Services.
“Bank Nifty, which was lower, is currently showing signs of recovery, coming back from its 200-DMA level of 43,300. ”The 50-DMA, located at 44,000, presents an immediate hurdle, while 44,400 stands as a critical hurdle,” said Santosh Meena of Swastika Investmarts.
Disclaimer: The views and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Updated: 26 Nov 2023, 06:11 IST