Weekly Market Wrap: Nifty, Sensex posted gains in 2nd straight week as US GDP growth eases recession fears

The BSE Sensex gained 652.70 points, or 1.1 per cent, at 59,959.85 during the week ended October 28, 2022, while the Nifty inclined 210.5 points, or 1.2 per cent to 17,786.80. Market participants got some encouragement as US GDP growth of 2.6 per cent in the third quarter and falling crude oil prices eases recession fear. Also, a report from a private rating agency states that the Indian economy’s recovery from the coronavirus pandemic, as well as the pace of the economy is better as compared to global peers despite headwinds such as high inflation, monetary policy tightening, rising interest rate, and the Russia-Ukraine war.

Market veteran Vinod Nair, Head of Research at Geojit Financial Services, said: “The domestic market remained flat with a positive bias during the week as favourable domestic cues were countered by mixed global mood. The US GDP grew by 2.6 per cent during the quarter that ended in September. However, it failed to lift the market as US tech stocks saw a significant sell-off following disappointing quarterly results and a bleak forecast. The ECB raised interest rates by 75 basis points, also signalling that it is making progress in combating record inflation, though the plausibility of a recession grew.”

“The expectation that the central banks would slow down the pace of rate hikes from the beginning of CY23 gave comfort to the global markets. As a result, bond yields across the globe softened, with the US 10yr yield diving below 4 per cent. The strengthening rupee, along with a softening treasury yield and decent Q2 earnings results, will support the domestic market in the near term”, he added.

As many as 40 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (9.1 per cent), Maruti Suzuki India emerged as the top gainer in the index. It was followed by JSW Steel (up 7.8 per cent), NTPC (up 5.5 per cent), Larsen & Toubro (up 5.3 per cent), and Power Grid Corporation of India (up 4.5 per cent).

Mahindra & Mahindra, Apollo Hospitals Enterprise and Shree Cement also advanced by over 4 per cent. On the other hand, Hindustan Unilever, Bajaj Finance, and HDFC Life Insurance Co declined 4.9 per cent, 2.5 per cent and 2.2 per cent, respectively.

Sector-wise, the BSE Auto index gained 3.9 per cent during the week gone by. BSE Oil & Gas index has also given a 3.3 per cent return. While BSE Capital Goods, BSE Metal, BSE Power and BSE Realty indices also surged more than 2 per cent. In contrast, the BSE Fast Moving Consumer Goods index has declined by 1.0 per cent.

Market watcher Rupak De, Senior Technical Analyst at LKP Securities, said: “Nifty remained volatile during the day before closing on a muted note. The consolidation continued as the index failed to give any directional move. On the daily timeframe, the index has sustained above the crucial moving average, confirming the short-term uptrend. Over the short term, the trend may remain sideways to positive. On the lower end, support is visible at 17,700/17,550; resistance on the higher end is placed at 17,850/17,950”.