Dalal Street had another fantastic week, with frontline benchmarks closing at all-time highs. After the US Federal Reserve held its benchmark interest rate constant and signaled rate cuts next year, Indian equities markets closed in the green for the seventh straight week, underpinned by buying across sectors. Aside from better-than-expected increase in the October Industrial Production statistics, which showed that India's industrial production hit a 16-month high in October, the market was also buoyed.
The BSE Sensex rose 1,658 points, or 2.37 percent, to 71,484 in the week ended December 15, while the Nifty rose 487 points, or 2.32 percent, to 21,457. The BSE Information Technology index gained the most (7.0%) during the previous week. While the BSE Teck and BSE Metal indices have increased by 5.6% and 4.5%, respectively. The BSE Healthcare index, on the other hand, increased by only 0.3%.
During the week, 37 firms in the Nifty 50 index produced positive returns to investors. HCL Technologies emerged as the index's top gainer with a weekly gain of 9.5%. Hindalco Industries (7.1%), NTPC (7.0%), Ultratech Cement (6.7%), and Tata Consultancy Services (6.4%) were the next companies. Tech Mahindra, Infosys, Wipro, SBI, Tata Steel, and Adani Ports all increased by more than 5%. Bharat Petroleum Corporation, Dr Reddy's Laboratories, and Maruti Suzuki India, on the other hand, fell 4.6%, 3.0%, and 2.9%, respectively.
Market Summary:
According to Vinod Nair, Head of Research at Geojit Financial Services, the market surged to fresh highs, boosted by strong signs on both the domestic and global fronts. "Robust domestic industrial production and manufacturing PMI, coupled with the RBI's positive remarks on India's GDP forecast, contributed to the bullish trend" . The decline in US bond yields, as well as the FED's projection of numerous rate reduction in 2024, fueled market optimism.
Investors expressed confidence that clouds over US economic growth will fade in H2CY24, predicting a smooth landing helped by monetary policy normalisation. "The IT industry gained 7.6 percent this week on the back of increased US demand, confidence about AI-based potential, and expectations that the Fed will decrease interest rates in 2024. We anticipate a market consolidation in the short term as a result of excessive valuations, El Nino fears, and a slowdown in global GDP." Nair stated.
Technical Prognosis:
According to Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities, markets raced higher on Friday following a gap-up opening. A rise in the closing hour assured that the Nifty finished with significant gains and near to the day's highs. The Nifty eventually closed at 21,456.65, up 273.95 points or 1.29 percent. Broad market indices, such as the BSE Small Cap index, rose less, trailing the Sensex/Nifty. Market breadth on the BSE/NSE was positive, reflecting the upbeat emotions.
Technically, with the Nifty rising to new all-time highs, the bulls remain in command. Further gains are likely once the immediate resistance level of 21492 is overcome. However, caution is advised in the short term because the 14-day RSI, at 84.93, is in overbought zone. "The 14-week RSI is 75.87, indicating that it is not extremely overbought and that there is room for more upside in the intermediate term." As a result, any short-term corrections can be used to invest in quality stocks. 21319-21235 are critical supports to watch for weakening." Gangadharan said
