Nifty and Sensex posted second consecutive weekly gains after hitting all time highs amid signals of cooling off global inflation

The Federal Open Market Committee (FOMC) minutes which hinted towards a less hawkish approach in the coming policies are expected to start a rally in global equities. While in the domestic market, India’s forex reserves have grown by $2.537 billion to $547.252 billion for the week ended November 18. Some optimism also came as Fitch Ratings said India’s bank credit will see strong growth in the current financial year despite effects of higher interest rates.

Added to that Foreign portfolio investors have infused funds worth Rs 32,344 crore in Indian stock markets so far in November and became net buyers again along with this market participants also turned bullish with S&P Global Ratings’ latest report that the global slowdown will have less impact on domestic demand-led economies such as India, Indonesia and the Philippines. These positive signals helped the BSE Sensex to gain 574.86 points, or 0.92 per cent, at 62,868.5 during the week ended December 02, while the Nifty inclined 183.35 points, or 0.99 per cent, to 18,696.1.

Market veteran Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, said: “Nifty and Sensex gained around 0.8% in the past week creating all-time highs. The BSE Midcap Index gained 1.63% while the BSE SmallCap Index gained 1.94%. A steady softening of global bond yields on expectations of ‘peak’ inflation and a decline in crude prices, helped equity markets continue the momentum and helped the Nifty-50 Index log its new all-time high on a closing basis.”

“FPIs were net buyers in the past five trading sessions, while DIIs were net sellers in the same period. Going forward, D-street will focus on macro trends. Going ahead, markets may be dominated by global news flows and steps taken by different governments to tackle their economies. On the economy front, Q2FY23 real GDP grew by 6.3%, while GST collections for October (collected in November) stood at Rs1.469 lakh cr (September: Rs1.517 lakh cr)” Chouhan added.

As many as 41 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (5.8 per cent), Britannia Industries emerged as the top gainer in the index. It was followed by Tata Steel (up 5.5 per cent), Ultratech Cement (up 5.3 per cent), Bharat Petroleum Corporation (up 5.1 per cent), and Grasim Industries (up 5.0 per cent).

SBI Life Insurance Company, Hindalco Industries, Hero MotoCorp and Reliance Industries also advanced by over 4 per cent. On the other hand, Eicher Motors, Maruti Suzuki India and Coal India declined 2.4 per cent, 2.2 per cent and 2.1 per cent, respectively.

Sector-wise, the BSE Realty index gained 4.2 per cent during the week gone by. BSE Metal has also given a 3.4 per cent return. While, BSE Fast Moving Consumer Goods, BSE Information Technology, BSE Oil & Gas, BSE Carbonex, BSE Teck and BSE Healthcare indices also surged more than 1 per cent during the week.

Market strategist Vinod Nair, Head of Research at Geojit Financial Services, said: “The rally in the domestic market was halted by negative cues from global counterparts and broad-based profit booking in large caps. The correction in the market was led by auto stocks as the sales data came in lower than expected due to weaker exports and sequential de-stocking. Declining manufacturing activity in the US is proof that the central bank’s policy tightening has started to show results, which in turn will encourage the Fed to keep rate hikes at bay.”