The market remained strong, with volatile trading, but it managed to rise. After a weak early start, a gradual recovery in subsequent trading not only mitigated losses, but also helped the index close near this week’s high.
On the benchmark front, Nifty and Sensex rose over 1 per cent each to settle at 22,040.70 and 72,426.64 levels, respectively, as investors shifted their focus to fundamentals and macroeconomic indicators. Major indexes remained resilient despite waning expectations for an early interest rate cut by the US Federal Reserve.
Most sectors traded in sync with the move, with autos, IT, energy and banking among the top performers. BSE Midcap index ended almost % higher. The BSE Small Cap Index underperformed this week and closed flat.
The broader index oscillated sharply on both sides and eventually settled into a mixture. Overall, the benchmark’s broader, domestically focused small-cap stocks fell 0.5% and mid-cap stocks rose 0.5%, underperforming the benchmark amid valuation concerns.
Also read: FPI offloading INRIndian stocks continue to decline in February by 29,520 billion yen: What is behind this trend?
“India’s auto sector had a solid week, supported by expected high demand and good earnings outlook. PSU banks benefited from improved asset quality and government focus on fiscal consolidation; It is attracting investors. Large caps have gained momentum and mid and small caps have booked profits due to valuation differences,” said Vinod Nair, Head of Research, Geojit Financial Services.
“Looking ahead, we believe a correction in PSU banks is likely due to rising valuation risks.Meanwhile, sectors such as metals, FMCG and capital goods are likely to see strong construction demand, backlog and rural “The outlook for recovery is expected to gain momentum from the narrowing of India’s trade deficit, supported by softer commodity prices and government-led manufacturing initiatives,” Nair added.
The third quarter earnings season ended with most companies reporting numbers in line with expectations. Market analysts say some companies are seeing margins come under pressure due to rising input costs and expenses.
“Overall revenue grew 34 percent year-over-year, compared to expectations of 28 percent year-over-year.” Highlight sectors for the third-quarter earnings season were energy, metals, BFSI, and cement, driven by an uptick in the capex cycle and strong Demand, healthy margins led to the biggest year-on-year rise in net profit. The key laggards were IT and FMCG,” said Arvinder Singh Nanda, senior vice president, Master Capital Services. said.
It’s a busy week ahead for major markets, with several initial public offerings (IPOs) and listings scheduled across the mainboard and small and medium-sized enterprises (SME) segments. Next week will be an important week from a domestic and technical perspective as investors will focus on stock price movements along with domestic and global indicators.
Also read: Stock selection for 2024 general elections: IRCTC, SBI ranked among top 10 stocks this season. Offers 10-20% upside potential
Although analysts remain positive and cautious overall, intraday fluctuations are likely as the Nifty 50 retests its all-time high. Expectations are rising that the Nifty 50 could break above 22,150 due to the recovery in major bank stocks and rotational buying of other major index stocks.
This could lead to the end of the consolidation phase and signal the resumption of a gradual uptrend towards the 22,500+ level. Experts also advised participants to closely monitor the banking index and continue with a “buy the buy” approach and focus on stock selection.
Here are the main drivers for the stock market next week:
5 new IPOs, 7 to be listed on D Street:
In the mainboard sector, Juniper Hotels’ IPO will launch on February 21, 2024 and GPT Healthcare’s IPO on February 22, 2024.
In the SME sector, Zenith Drug’s IPO opened for bidding on February 19th, Deem Roll Tech’s IPO opened for bidding on February 20th, and Sadav Shipping’s IPO opened for bidding on February 23rd. Ru. Among the ongoing SME IPOs are Kalaharidhan Trends IPO, Thai Casting IPO and Atmasco IPO. , Interiors and More IPO, and Esconet Technologies IPO closes February 20th for applications.
Among the listed stocks, shares of Vibhor Steel Tubes will be listed on stock exchanges BSE and NSE on February 20. Additionally, WTI Cabs shares will be listed on the NSE SME on February 19th. On February 23, Kalahridhaan Trendz, Thaai Casting, Atmastco, Interiors and More and Esconet Technologies will be listed on NSE SME.
FII activities:
Foreign institutional investors (FIIs) were buyers in three of the five sessions last week, but the total sales amount was INR6,240.55 million, Domestic Institutional Investors (DII) were buyers in all five sessions, and the total investment amount was INR8,731.6 million, according to stock exchange data. Every month, the FII sells shares in the Indian market till he reaches Rs 100 crore. 1,417.1 billion yen from February 1 to 16, 2024.
“The trend of FII selling is likely to continue as the US 10-year bond yield remains high at 4.24%,” he said. The DII buying trend is likely to continue as inflows into DIIs remain strong,” said Dr. VK Vijahakumar, Chief Investment Strategist, Geojit Financial Services.
Foreign portfolio investors (FPIs) started February on a strong note, but the global weakness led to a change of direction, with Indian markets continuing their January sell-off. FPIs continued to buy primary market and bonds, offsetting the total net sales so far in February. However, capital outflows by FPIs continue. INR29,52 billion by 2024.
FPI sold INR377.6 billion worth of Indian stocks, total inflows are INR19,608 crore as on February 16, taking into account debt, hybrid, debt VRR and equity, according to National Securities Depository Ltd (NSDL) data.
“The sharp rise in US Treasury yields triggered by higher-than-expected consumer price inflation led to continued selling by FPIs in the spot market. From February to the 16th, FPIs sold equivalent amounts of equities.” INR611.2 billion through exchanges. However, if you purchase through “primary market and other”, the net short amount from February to the 16th will decrease as follows: INR3,775 crore,” said Dr VK Vijayakumar.
As long as US Treasury yields remain high, the FPI selling trend is likely to continue. FPI bond purchases that began earlier this year have continued. FPIs bought the debt. INRFrom February to the 16th, the total amount of government bond purchases in 2024 was 1,655.9 billion yen. INR36,395 billion. Analysts say this trend is likely to continue.
Global queue:
Investors’ expectations for Fed interest rate cuts rose as US retail sales data declined. Further support was provided by disinflationary trends in the euro zone and hopes for stronger consumer demand after the New Year holidays in China, analysts said.
The US Federal Reserve (Fed) is scheduled to release the Federal Open Market Committee (FOMC) minutes this week, which will provide further clues about the trajectory of interest rates in global markets, giving investors an opportunity to see where interest rates will move forward. We will be closely monitoring the actions of the US Federal Reserve (Fed). First.
“There have been few conclusive signals this week, with market attention remaining on developments in the dollar index and U.S. Treasury yields. High oil prices pose a potential risk, but the general bullish sentiment has turned negative. It largely obscures developments. Additionally, the US FOMC minutes are also in the spotlight,” said Santosh Meena, head of research at Swastika Investmart.
Going forward, the market will react to major global economic events, world news, trends in Asian markets, movements in the rupee against the dollar, inflationary pressures, interest rates, and measures taken by various domestic and global governments to support the economy. Sho.
“Global indicators will largely determine next week’s trends. Among the major markets, the US benchmark index, the Dow Jones Industrial Average (DJIA), has seen volatile fluctuations, with a 38,300 A decisive breakdown could prompt profit-taking into the 37,500-37,800 zone,” said Ajit Mishra, senior vice president technical. Religare Broking Ltd. Research
Oil price:
Oil prices eased after rising in pre-trade as geopolitical tensions in the Middle East more than offset the International Energy Agency’s (IEA) forecast of a slowdown in demand. The rising risk of conflict escalating in the Middle East supported oil prices.
Brent crude oil futures rose 61 cents, or 0.74%, to $83.47 a barrel. U.S. West Texas Intermediate crude oil rose $1.16, or 1.49%, to settle at $79.19 as the nearby March contract expires on Tuesday. The April contract rose 87 cents to $78.46. For the week, Brent crude rose more than 1% and the U.S. benchmark rose about 3%.
The IEA said global oil demand growth was losing momentum and cut its growth forecast for 2024. The agency expects global oil demand growth to slow to 1.22 million barrels per day (barrels) in 2024, about half of last year’s growth.
Corporate activities:
Shares of Coal India, Life Insurance Corporation of India (LIC), Hero Motocorp, Steel Authority of India (SAIL), Aurobindo Pharma, Hindustan Aeronautics Limited (HAL) and many others trade ex-dividend will be done. Several other companies also plan to make bonus payments or installment deals next week.Check the complete list here
Technical view:
A recovery in major bank stocks, coupled with rotational buying in other major index stocks, is raising hopes that the index may attempt to break out of the prevailing range. However, experts said that various global indicators will continue to weigh on sentiment and could trigger a violent reaction in the meantime.
“We are looking at persistence above 22,150 to indicate a resumption of the uptrend and inching towards levels above 22,500. On the contrary, support has moved into the 21,450-21,700 zone. Currently , most sectors are in line with the benchmark, so participants should continue with a ‘buy the buy’ approach and focus on stock selection,” said Ajit Mishra of Religare Brokings.
Nifty is showing signs of a bullish breakout from the cup-and-handle formation, with 22,125 being the key resistance level, said Santosh Meena of Swastika Investmarts. Beyond this barrier, further gains are expected towards the 22,350/22,500 levels. On the contrary, solid support lies within his 21,800-21,600 range.
“Q3 earnings season ended on a strong note with Nifty delivering strong performance of 17 per cent YoY PAT growth (+11 per cent expected). As outlook for pre-election rally is very strong , we expect market sentiment to further strengthen,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
The weekly chart of Bank Nifty is forming a double bottom pattern near the strong demand zone around 44,500-44,800 levels. “The near-term texture is on the bullish side, with 45,200 acting as an immediate support level and 46,800 a hurdle to the upside.” A hold above 46,800 would have been a move of over 1000 points. 48,000 level is expected,” said Arvinder Singh Nanda of Master Capital Services.
Disclaimer: The views and recommendations expressed above are those of individual analysts, experts, and brokerages and are not the views of Mint. We recommend checking with a certified professional before making any investment decisions.
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Published: February 18, 2024, 5:49 AM IST
