Markets week ahead: Will Sensex, Nifty 50 continue their winning spree?
Despite weak global rivals, Indian markets generally saw a favourable week between October 17 and 21.
The Sensex and Nifty 50 increased by more than 2% apiece over the week as the results season and anticipation of an acceleration in demand patterns around Diwali boosted mood generally.
For the sixth day in a row, the Sensex and Nifty 50 both maintained their winning streaks. Stocks of banks did better than their rivals. Due to a lengthy vacation for Diwali, stock market activity will be restricted to just three days in the upcoming week.
On Friday, the Sensex ended at 59,307.15, up 104.25 points or 0.18%, and the Nifty 50 finished at 17,576.30, up 12.35 points or 0.07%. Due to their Q2 results, industry giants including Axis Bank, ICICI Bank, HUL, and Kotak Bank were the best performers.
Regarding sectoral indexes, on October 21 BSE Bankex increased by about 949 points and Bank Nifty increased by more than 684 points.
The rupee, however, strengthened versus the US dollar due to the RBI’s assistance, stability in domestic stocks, and a persistent rise in treasury rates.
The rupee reached the 83-mark before Friday’s closure, which was 82.6750 to the dollar. The local currency has decreased in value vs the dollar by about 4% during the last six weeks.
On the other side, after maintaining a negative taste for stocks, FIIs changed their buying behaviour in this week’s last two trading sessions, with October 20 seeing the biggest buying.
FIIs invested in the stock market on October 21 to the tune of 438.89 crore and on October 20 to the tune of 1,864.79 crore. Between October 17 and 19, there was about Rs. 979.34 crore in FII equity sales.
In the week of October 17–21, the Sensex increased by more than 1,387 points, or 2.4%, while the Nifty 50 increased by roughly 391 points, or 2.3%.
The market capitalization of the BSE-listed companies increased by more than 4.13 lakh crores this past week, reaching almost 274.42 lakh crores. By the conclusion of the past week on October 14, the market cap was around 270.29 lakh billion.
“Despite global concerns, domestic mood remained optimistic ahead of Diwali and the market shown its resilience, bolstered by a decent start to the earnings season,” said Vinod Nair, Head of Research at Geojit Financial Services.
For the past six sessions, the benchmark indexes have increased thanks in part to stock-
particular impetus in the FMCG, finance, and IT sectors. The bank nifty increased by 3.8% as a result of loan growth reaching a 10-year high of 17.94% YoY as of October, while PSU banks increased by 11% during the course of the week.
What to expect in markets week from October 24-28?
Owing to Lakshi Pujan (major Diwali), trading in stocks, futures, commodities, and other securities will be suspended on October 24. On October 26, trading will be suspended due to the Diwali Balipratipada festival.
Trading will thus only be possible on October 25, 27, and 28. On October 24, however, markets will be open from 6:15 p.m. to 7:15 p.m. as part of Muhurat trading.
Nair claims that although domestic investors maintained their cautious approach in anticipation of the short week, some profit taking was also observed near the conclusion of the week.
On the international front, worries of a more aggressive monetary policy by the central bank increased when UK inflation increased to a 40-year high of 10.1% in September.
The market direction will be determined by the earnings season and global mood as there are no significant triggers for the upcoming week.
Reliance Securities’ Head of Research Mitul Shah said, “The Indian rupee exceeded the 83 per dollar level for the very first time, on rising dollar demand from petroleum firms and a widening current account deficit.
Only strengthened US bond rates and a rising currency made the situation worse. The Indian rupee has lost 12% of its value versus the US dollar this year.
The market is concerned that more rate increases by the US Fed might push up US Treasury rates once further, which would weaken the rupee.
Shah further stated, “Healthy revenue growth has been seen thus far in the 2QFY23 financial season, but increased inflationary pressure took a toll on profitability.
The sales of 120/BSE500 firms has grown by 23% YoY, while EBITDA has grown by 15% YoY and PAT has remained basically steady.”
Added Shah, “Both in the local economy and in the US economy, inflation is still persistently sticky.
While the global recession and downgrade of growth for major economies persisted, India’s growth is still strong and predicted to be one of the fastest rising economies in the world.
The US Federal Reserve’s monetary policy meeting, set for November 2nd, is being watched by the market. In the immediate future, there will be close attention paid to commentary on holiday demand, inflation expectations, and rate hikes.”
The following companies, among others, have significant Q2 earnings to keep an eye on during the week of October 24-28: Dabur, Tata Chemicals, Indus Tower, SBI Card, REC, and PNB Housing Finance.