Indian equity benchmarks extended the Bull Run for fourth straight week as investors turned optimistic after US inflation eased more than had been expected, spurring hopes that the Federal Reserve might scale down plans for more interest rate hikes. Market participants also got some encouragement from a statement coming from the former Vice-Chairman of NITI Aayog Arvind Panagariya that states India may log a growth rate of eight per cent of real Gross Domestic Product (GDP) in FY23. These positive signals helped the BSE Sensex to gain 844.68 points, or 1.4 per cent, at 61,795.04 during the week ended November 11, while the Nifty inclined 232.55 points, or 1.3 per cent, to 18,349.7.
Market veteran Deepak Jasani, Head of Retail Research at HDFC Securities, said: “Nifty rose sharply on Nov 11, hitting fresh 52-week highs, post the soft CPI data coming out of US. Volumes on the NSE touched a recent high. Among sectors, IT, Metals and Realty indices rose the most while Auto, Power and FMCG indices fell. Most Asian stock markets rallied on Friday after softer-than-expected U.S. inflation data posited a slightly less hawkish outlook for interest rates, while China’s withdrawal of some COVID-related curbs drove outsized gains in local markets.”
“European stocks and US futures rose on Friday, as cooler than expected inflation data for the world’s biggest economy fueled speculation that the Federal Reserve will slow the pace of interest rate tightening later this year. Nifty could now rise towards 18458-18604 band in the near term while 18179-18255 band could provide support,” Jasani added.
As many as 25 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (7.8 per cent), Britannia Industries emerged as the top gainer in the index. It was followed by HDFC Bank (up 7.6 per cent), Housing Development Finance Corporation (up 6.5 per cent), HCL Technologies (up 4.3 per cent), and UPL (up 3.9 per cent).
Adani Ports and Special Economic Zone, Infosys, Hero MotoCorp and Tata Consultancy Services also advanced by over 3 per cent. On the other hand, Divi’s Laboratories, Power Grid Corporation of India and Bajaj Finserv declined 12.6 per cent, 5.4 per cent and 4.6 per cent, respectively.
Market watcher Vinod Nair, Head of Research at Geojit Financial Services, said “The domestic market joined the global run as markets across the world cheered the lower-than-expected US inflation data. The US dollar slumped along with treasury yields as investors evaluated the likelihood of a less hawkish rate hike by the Fed. Reduced treasury yields will aid to improve FII inflows. The rally of domestic market was led by IT stocks as recession fears reduced and HDFC twins after merger overhang.”
Sector-wise, the BSE Information Technology index gained 3.0 per cent during the week gone by. BSE Teck index has also given 2.8 per cent return. While BSE Bankex, BSE Metal, BSE Carbonex, BSE Oil & Gas and BSE Realty indices also surged more than 1 per cent. While BSE Healthcare and BSE Auto indices declined more than 2 per cent during the week.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said: “The BANK NIFTY bulls managed to surpass the hurdle of 42,000 with major participation from HDFC bank. The index to move forward will require participation from the other counters to go higher towards the levels of 43,000-43,500. The lower-end immediate support stands at the 41,700-41,500 zone which should act as a cushion.”
