Indian equities benchmarks concluded the holiday-shortened week at new all-time highs, continuing their winning run for a fourth consecutive week. The global rating agency Moody's increased India's GDP growth estimate for the 2024 calendar year to 6.8% from 6.1% previously projected, citing "stronger-than-expected" economic data from 2023 and waning headwinds in the global economy. As a result, stock markets closed the day higher.
A logical shift towards equities was instigated by bond yields decreasing and prospects of a rate cut by the Fed. During the week that concluded on March 07, 2024, these indications caused the BSE Sensex to rise 313 points, or 0.42%, to 74,119.39 levels. As the Nifty reached 22493.55, up 115 points, or 0.51%, higher.
In terms of sectors, the BSE Power index increased by 1.9% over the previous week. BSE Bankex increased 1.2%, while the BSE Metal index saw a gain of 1.5%. Conversely, the BSE Information Technology index experienced a 1.4% decline.
Up to 29 firms out of the Nifty 50 index gave investors a profit during the course of the week. Bajaj Auto emerged as the index's top gainer with a weekly gain of 10.4%. Tata Motors (5.2%), HDFC Life Insurance Company (4.9%), Bharti Airtel (6.1%), and Tata Consumer Products (4.5%) came next. Additionally, NTPC and Sun Pharmaceutical Industries had increases of more than 3%.
However, there was a fall of 4.3%, 3.8%, and 3.3% in Ultratech Cement, Shree Cement, and Mahindra & Mahindra, respectively.
Market macros: According to Vinod Nair, Head of Research at Geojit Financial Services, the local market showed range-bound movement but ended positively despite conflicting signals from the international market. Reasonable investors moved to equities as a result of falling bond yields and expectations of a rate cut from the Fed, which supported the market. Bank stocks benefited from an improving macroeconomic story, but the IT sector was worse due to market worries worldwide.
Nair continued, saying that large purchases of auto stocks were prompted by the expansion of the Fame II program and improved demand projections for passenger cars. The current fiscal year's faster-than-expected economic growth lifted investor enthusiasm in capital goods and metals companies, leading to a surge in the corresponding sector indices. But overvaluation caused small- and mid-cap stocks to decline, which in turn prompted profit booking and raised demand for large-cap stocks.
“The European Central Bank maintained the current rate structure and will watch for more proof of inflation management. Investors will gain insight into the global macroeconomic environment with the release of US payroll data and the impending inflation data from the US, China, and India next week. Because of the elevated valuations and the impending policy rate guidance releases, we anticipate continued volatility in the coming week," Nair said.
Nifty Outlook: Call writers at the 22,500 strikes considerably increased their holdings, and the Nifty remained below the critical 22,500 line, according to Rupak De, Senior Technical Analyst at LKP Securities. Support is anticipated to hold at 22,400 on the downside. The buy-on-dips approach is probably going to stick around as long as it stays over 22,400. Positively, a strong move above 22,500 would pique investors' interest in the market and short-term drive the index up to 22,700, according to De.
