Last Updated:December 08, 2024, 11:11 IST

Investors’ sentiments will be guided by a host of domestic and global macro economic data announcements this week

Last week, the BSE benchmark jumped 1,906.33 points or 2.38 per cent, and the NSE Nifty climbed 546.7 points or 2.26 per cent.

Investors’ sentiments will be guided by a host of domestic and global macroeconomic data announcements this week, along with the trading activity of foreign investors and trends in world stocks, analysts said.

Rupee-Dollar Trend and Brent Crude Impact

Besides, the rupee-dollar trend and movement of global oil benchmark Brent crude will also be crucial in dictating terms in the market, experts added.

Key Global and Domestic Influencers

“The domestic stock market is likely to be shaped by a mix of global cues, domestic economic indicators, and the flow of investments from foreign and domestic institutional investors. Key factors like the rupee’s exchange rate and crude oil prices will play a critical role in determining market trends.

Geopolitical Tensions and Emerging Markets

“Globally, geopolitical tensions, particularly the ongoing Russia-Ukraine conflict, continue to pose challenges. However, recent declines in the dollar index and US bond yields have created a more favourable environment for emerging markets like India,” Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said.

Macroeconomic Data to Drive Sentiment

On the economic front, significant macroeconomic releases, including retail inflation and industrial production data from India as well as US core CPI, are expected to influence overall market sentiment, Gour added.

Recent Market Performance

Last week, the BSE benchmark jumped 1,906.33 points or 2.38 per cent, and the NSE Nifty climbed 546.7 points or 2.26 per cent.

Foreign Institutional Investors (FIIs) Strategy

“FIIs turning buyers in early December, in a total reversal of their sustained selling strategy during the last two months, has altered the market sentiments. The change in FII (Foreign Institutional Investors) strategy is getting reflected in stock price movements, particularly in large-cap banking stocks in which FIIs have been sellers,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

US CPI Inflation and Fed Insights

The release of US CPI inflation data will give some insights into the Fed’s December meeting, an expert said.

Focus on Domestic Economic Indicators

“The markets’ attention is expected to turn towards macroeconomic indicators like IIP and CPI inflation. Additionally, the trend of FII inflows, following their recent buying spree, will remain a key focal point for market participants,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Key Global Economic Data Releases

Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said this week will see significant economic data releases, including GDP numbers from Japan and the UK, along with China’s CPI and India’s CPI.

(With PTI inputs)

Last Updated:November 17, 2024, 15:21 IST

Trading activity of foreign investors and global trends will be the major driving factors for the equity markets

Last week, the BSE benchmark gauge Sensex fell 1,906.01 points or 2.39 per cent. (Representative image)

Trading activity of foreign investors and global trends will be the major driving factors for the equity markets in a holiday-shortened week ahead, according to analysts.

Trading Holiday for Maharashtra Assembly Elections

Leading stock exchanges BSE and NSE have declared a trading holiday on November 20 for assembly elections in Maharashtra.

Election Schedule

Elections to the 288-member state legislative assembly will be held on November 20, and votes will be counted on November 23.

Impact of Elections and Global Indicators on Markets

“The Indian stock market will remain shut on Wednesday, November 20, in observance of Maharashtra assembly elections. The election results, along with key global economic indicators, including US bond yields, dollar index performance, US unemployment claims, flash manufacturing and services PMI data, and Japan’s inflation data, will be pivotal in shaping market direction.

FII Activity and Emerging Market Dynamics

“High US bond yields and a strengthening dollar post-election have impacted emerging markets like India, and FII (Foreign Institutional Investors) activity remains a key factor, influencing Indian equities in the near term,” Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, said.

Other Key Market Influencers

The movement of global oil benchmark Brent crude and rupee-dollar trend would also influence trading in the market, experts said.

Shortened Trading Week and Focus on FII Flows

“This week is also shortened due to a holiday, and with the earnings season largely concluded, attention will shift back to FII flows. Foreign institutional investors have been on a consistent selling spree for the past month and a half. Additionally, traders will keep a close watch on global market trends,” Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Recent Market Performance

Last week, the BSE benchmark gauge Sensex fell 1,906.01 points or 2.39 per cent.

Equity markets were closed on Friday for Guru Nanak Jayanti.

Decline from Record Highs

The BSE benchmark fell a massive 8,397.94 points or 9.76 per cent from its all-time high, and the Nifty has also lost 2,744.65 points or 10.44 per cent from the record peak.

Sensex hit its record peak of 85,978.25 on September 27 this year, and the NSE Nifty also reached a record 26,277.35 on the same day.

Factors Behind Market Volatility

The sharp fall in the benchmark indices was triggered by foreign investors fleeing the domestic market, weak Q2 earnings and high valuations of equities.

Markets remain volatile on the back of subdued Q2 results, rising dollar index and continuous FII selling over the past month and a half, Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

FPIs Selling-spree Continues

Foreign investors have pulled out Rs 22,420 crore from the Indian equity market so far this month, owing to high domestic stock valuations, increasing allocations to China, and the rising US dollar as well as Treasury yields.

With this sell-off, Foreign Portfolio Investors (FPIs) have recorded a total outflow of Rs 15,827 crore in 2024 so far.

According to the data, FPIs recorded a net outflow of Rs 22,420 crore so far this month. This came following a net withdrawal of Rs 94,017 crore in October, which was the worst monthly outflow.

Before this, FPIs withdrew Rs 61,973 crore from equities in March 2020.

In September 2024, foreign investors made a nine-month high investment of Rs 57,724 crore.

Eight of Top 10 Most-valued Firms Take Rs 1.65 Lakh Cr Hit in Mcap

Eight of the top-10 most valued firms together lost Rs 1,65,180.04 crore from market valuation in a holiday-shortened last week, with HDFC Bank and State Bank of India taking the hardest hit in line with a weak trend in equities.

The valuation of HDFC Bank tanked by Rs 46,729.51 crore to Rs 12,94,025.23 crore.

State Bank’s market valuation eroded by Rs 34,984.51 crore to Rs 7,17,584.07 crore.

Reliance Industries remained the most valued domestic firm, followed by TCS, HDFC Bank, ICICI Bank, Bharti Airtel, Infosys, State Bank of India, ITC, LIC and Hindustan Unilever.

(With agency inputs)

Quarterly earnings from corporates, global trends, and trading activity of foreign investors will guide market sentiment this week, analysts said, adding that benchmark indices may face volatile trends.

“The upcoming release of Q2 results will be closely watched, providing insights into corporate performance. Meanwhile, the escalating tensions between Israel and Iran introduce a significant geopolitical risk, potentially leading to increased oil prices and market volatility. Foreign Institutional Investors (FIIs) have been a key driver of the Indian market’s performance, and their stance will depend on factors such as global economic conditions, and domestic political developments,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

HDFC Bank on Saturday reported a 6 per cent increase in September quarter net profit to Rs 17,825.91 crore on a consolidated basis.

On a standalone basis, the largest private sector lender’s post-tax net grew to Rs 16,820.97 crore during the reporting period, as against Rs 15,976.11 crore in the year-ago period.

“In the absence of any major triggers, market participants will focus on upcoming earnings for direction. First, they will react to the results of banking heavyweights such as HDFC Bank and Kotak Bank. Later, companies like ITC, Hindustan Unilever, BPCL, HPCL, and Ultratech Cement will also announce their earnings,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Bajaj Housing Finance, Adani Green Energy, Bajaj Finance, One97 Communications, Zomato, Bajaj Finserv and Bank of Baroda would also announce their earnings this week.

Kotak Mahindra Bank on Saturday posted a 13 per cent growth in September quarter profit to Rs 5,044 crore, helped by performance of its subsidiaries.

On a standalone basis, the private sector lender’s net profit for the quarter grew 5 per cent to Rs 3,344 crore, limited by a jump in provisions.

“Geopolitical uncertainty, coupled with sluggishness in the Chinese economy and persistent FII outflows from the domestic markets, have led to caution,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Massive foreign fund exodus from the domestic markets dragged the benchmark indices lower last week.

Last week, the BSE benchmark declined 156.61 points or 0.19 per cent, and the Nifty went lower by 110.2 points or 0.44 per cent.

“The trend of FII selling and DII (Domestic Institutional Investors) buying is likely to sustain in the near-term. The rationale behind FPIs (Foreign Portfolio Investors) selling is the elevated valuations in India and the cheap valuations of Chinese stocks, which the FPIs have been buying aggressively since mid-September,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

Mcap of 4 of Top-10 Most Valued Firms Jumps Rs 81,151 Cr Last Week

Four of the top-10 most-valued firms together added Rs 81,151.31 crore in market valuation last week, with ICICI Bank and HDFC Bank emerging as the biggest gainers.

While HDFC Bank, Bharti Airtel, ICICI Bank, and the State Bank of India were the gainers, Reliance Industries, Tata Consultancy Services (TCS), Infosys, Hindustan Unilever, ITC, and Life Insurance Corporation of India (LIC) suffered a combined erosion of Rs 76,622.05 crore from their market valuation.

ICICI Bank added Rs 28,495.14 crore, taking its market valuation to Rs 8,90,191.38 crore.

The valuation of HDFC Bank jumped Rs 23,579.11 crore to Rs 12,82,848.30 crore.

State Bank of India’s market valuation climbed Rs 17,804.61 crore to Rs 7,31,773.56 crore and that of Bharti Airtel went up Rs 11,272.45 crore to Rs 9,71,707.61 crore.

On the other hand, the market capitalisation (mcap) of Infosys slumped Rs 23,314.31 crore to Rs 7,80,126.10 crore.

The valuation of Reliance Industries declined Rs 16,645.39 crore to Rs 18,38,721.14 crore.

The mcap of Hindustan Unilever tumbled Rs 15,248.85 crore to Rs 6,38,066.75 crore and that of TCS diminished by Rs 10,402.01 crore to Rs 14,91,321.40 crore.

LIC’s valuation went lower by Rs 8,760.12 crore to Rs 5,91,418.91 crore.

The mcap of ITC dipped Rs 2,251.37 crore to Rs 6,08,682.29 crore.

Reliance Industries continued to remain the most-valued domestic firm, followed by TCS, HDFC Bank, Bharti Airtel, ICICI Bank, Infosys, State Bank of India, Hindustan Unilever, ITC, and LIC.

(With PTI inputs)