The Indian equity market is experiencing a robust bull run, climbing steadily despite several challenges. Domestic equity benchmarks Sensex and Nifty 50 recovered from post-budget losses and added 0.9 per cent and 1.24 per cent, respectively, for the week, posting the eighth week of gains — registering their best weekly winning streak in the last 14 years (since 2010).
As markets prepare to start the new month, investors will keenly eye the next set of April-June quarter results for fiscal 2024-25 (Q1FY25), the upcoming US Fed interest rate decision, domestic and global macroeconomic data, corporate announcements, foreign fund inflow, crude oil prices, and global cues will drive market movement this week.
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The last week was marked by both volatility and resilience, with some profit booking ahead of the Union Budget announcement and a sharp dip on the budget day due to unexpected hikes in long-term capital gains (LTCG), short-term capital gains (STCG), and securities transaction Tax (STT).
However, from the budget day’s low, the indices displayed a massive recovery, culminating in a remarkable performance on Friday – when Sensex and Nifty 50 snapped their five-day losing streak and logged their best session in seven weeks. The rebound was driven by heavy value-buying at lower levels and buoyancy in some mega-cap stocks.
Nifty 50 hit its new all-time high of 24,861.15, ending the week at 24,834.85, while the Bank Nifty declined for the third consecutive week, dropping nearly 1.86 per cent to close at 51,295.95. Sensex, however, narrowly missed setting a record high. Initial declines to a three-week low were driven by fundamental concerns following the increase in capital gains taxes and STT on F&O trades.
There were concerns on the Street about the midcap and smallcap segments following the hike in capital gains tax. However, the market shrugged off these worries, leading to solid gains in the broader market as well. In terms of sectors, the Nifty auto and Nifty pharma sectors were the standout performers, each gaining more than five per cent. Other sectors that performed well included IT, FMCG, and Oil & Gas.
On a positive note, the insurance sector also performed exceptionally well last week, driven by strong earnings, attractive valuations, and the absence of negative news in the budget. Domestic institutional investors (DII) were cautious ahead of the budget, sitting on cash. However, they returned aggressively after the budget, purchasing shares worth ₹1,000 crore.
“The Budget 2024-25 has not sparked any significant excitement in the market, while it was both populist and prudent…Many of the measures are a reiteration of the interim budget, and the broader market appears to be losing momentum due to a lack of new impetus,” said Vinod Nair, Head of Research, Geojit Financial Services.
‘’DIIs continue to employ a “buy on dips” strategy, which contributed to market gains on the week’s last trading day, particularly in the pharma, auto, metal, IT, and FMCG sectors. The market has now recovered its losses from budget day, driven by positive US GDP data and expectations of improved global demand. Moving forward, the direction of the domestic market will…
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