Weekly Market Wrap: Strong domestic macro indicators help stock markets extend their winning streak for 3rd straight week

Extending their winning streak for the third straight week, Indian equity benchmarks ended the passing week with a gain of around two percentage points, driven by the strength in Asian markets as investors eyeing clues on company health and US jobs data for signals on future rate hikes. In the domestic market,  GST collections increased 16.6 per cent to Rs 1.52 lakh crore in October. The revenue for October 2022 is the second-highest monthly collection, next only to the collection in April 2022. Also, for the second time, the gross GST collection crossed Rs 1.50 lakh crore mark.

Market participants got some encouragement from a report that India is expected to surpass its tax collection goal by more than Rs 2 lakh crore ($24.3 billion) in the current fiscal year. Also after the production of eight infrastructure industries that comprise the core sector recovered to grow at 7.9 per cent in September. India’s factory activity expanded at a stronger pace in October. The Manufacturing PMI, rose to 55.3 in October from September’s 55.1, remaining above the 50-level for the sixteenth month.
Meanwhile, the S&P Global India Services PMI Business Activity Index surged to 55.1 in October from 54.3 in September. These positive signals helped the BSE Sensex to gain 990.51 points, or 1.7 per cent, at 60,950.36 during the week ended November 4, while the Nifty inclined 330.35 points, or 1.9 per cent to 18,117.15.
Market veteran Deepak Jasani, Head of Retail Research at HDFC Securities, said: “Global equities trimmed a weekly loss as Chinese shares surged amid signs that authorities are trying harder to ease the impact of its Covid-Zero policy. Emerging market shares jumped 2 per cent on Friday and were on course for their best weekly performance in more than a year, thanks to a surge in China shares this week on optimism around the lifting of COVID restrictions.”
“Worries about China’s growth amid its zero-COVID policy, and global monetary policy tightening to stave off inflation exacerbated by the Russia-Ukraine war, have roiled markets this year, leaving little room for sustained risk appetite. The unemployment rate in India rose to 7.77 percent in October compared to a four-year low of 6.43 percent in September, data from Centre for Monitoring Indian Economy (CMIE) show.”
“Nifty rose 1.86 per cent for the week rising for the third consecutive week. Though Nifty shows volatile moves during the day, the underlying trend continues to be up. 17899 could be a support for the Nifty while 18179 and later 18287 could be a resistance for the near term.” Jasani added.
As many as 39 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (9 per cent), Bajaj Finserv emerged as the top gainer in the index. It was followed by Ultratech Cement (up 7 per cent), Hindalco Industries (up 6.3 per cent), Divi’s Laboratories (up 5.6 per cent), and Shree Cement (up 5.4 per cent).
Sun Pharmaceutical Industries, Adani Ports and Special Economic Zone, Grasim Industries, JSW Steel, Asian Paints, and State Bank Of India also advanced by over 4 per cent. On the other hand, Apollo Hospitals Enterprise, Axis Bank, and Maruti Suzuki India declined 4.6 per cent, 4.0 per cent and 2.8 per cent, respectively.
Sector-wise, the BSE Metal index gained 4.7 per cent during the week gone by. BSE Healthcare index has also given 2.6 per cent return. While BSE Oil & Gas and BSE Capital Goods indices also surged more than 2 per cent. Also, all sectoral Indices have posted positive numbers for the week.
Market watcher Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said: “The Indian indices throughout the week witnessed a volatile trading session where both the bulls and the bears were active with full force. The indices witness flat closing on a weekly perspective with sector and stock-specific moves. Major buying action was seen in sectors such as infra, metals and railway stock, PSU bank. The Nifty metal index was the top-performing sector with 7.5 per cent gains followed by the PSU BANK index which was up by 2.9 per cent”.