Investors will eye several stock market triggers in the third week of the month including domestic macroeconomic data, US Federal Reserve minutes-of-the-meeting, crude oil prices, foreign capital inflow, along with global cues.
Markets traded volatile in the continuation to the prevailing consolidation phase but managed to edge higher. The beginning was subdued however gradual recovery in the following sessions not only pared losses but also helped the index to close around the week’s high.
On the benchmark front, both Nifty and Sensex gained over a per cent each to settle at 22,040.70 and 72,426.64 levels respectively as investors shift their focus to fundamentals and macroeconomic indicators. The frontline indices remained resilient in the face of fading expectations of early rate cuts by the US Federal Reserve.
Most sectors traded in sync with the move wherein auto, IT, energy and banking were among the top performers. The BSE Midcap index closed almost a per cent higher. The BSE Smallcap index underperformed and closed flat for this week.
The broader indices oscillated sharply on both sides and eventually settled mixed. Overall, the broader, more domestically-focused small-caps of benchmarks fell 0.5 per cent and mid-caps added 0.5 per cent, underperforming the benchmarks, amid valuation concerns.
‘’The Indian auto sector had a strong week, lifted by anticipated high demand and a favourable earnings outlook. PSU Banks, benefiting from improved asset quality and the government’s focus on fiscal prudence, are attracting investors. Large caps gained traction, with mid and small caps seeing profit booking, driven by valuation gaps,” said Vinod Nair, Head of Research, Geojit Financial Services.
‘’Looking ahead, a correction in PSU banks seems likely due to higher valuation risks. Meanwhile, sectors such as metals, FMCG, and capital goods are anticipated to gain momentum driven by robust construction demand, an order backlog, rural revival prospects, and India’s narrowing trade deficit. This is boosted by softer commodity prices and government-led manufacturing initiatives,” added Nair.
Q3 earning season came to an end with most of the companies posting numbers in line with estimates. Some companies witnessed margin pressure due to rising input costs and expenses, said market analysts.
‘’The overall earnings grew 34 per cent year-on-year (YoY) as compared to the estimate of 28 per cent YoY. The stars sectors of the Q3 earning season were Energy, Metal, BFSI, cement with the highest YoY surge in net profit, driven by an upswing in capex cycle, robust demand and healthy margins. The major laggards were IT and FMCG,” said Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd.
Going forward, a busy week awaits the primary market as several new initial public offerings (IPO) and listings are slated across the mainboard and small-and-medium enterprises (SME) segments. The upcoming week will be crucial from the domestic and technical point of view as investors will closely eye the stock action along with domestic and global cues.
Overall, analysts maintain a positive yet cautious stance as Nifty 50 is set to retest its record high level, but there could be bouts of intra-day volatility. The recovery in banking heavyweights combined with rotational buying in other index majors has raised hope of a possible…
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