ID-Street wrap for week to Nov 8- Nifty sheds 0.64% in eventful week; IT is a very strong stock
In an eventful week, focused on events including the historic US Presidential election, the November FOMC meeting and expectations about China’s stimulus among other things now clearly behind us, India’s headline indicators ended up lower. For the week to November 8, the Sensex ended 0.3 percent lower at 79,486.32, while the Nifty was down 0.64 percent to 24,148.2 levels.
Within the broder market, the Smallcap index faced anger with a cut of 1.86 percent, while the Midcap index fell by about 0.25 percent.
Vinod Nair, Head of Research, Geojit Financial Services noted that Indian stocks continued to face consolidation amid FII selling. This broad correction is particularly evident in sectors with excess valuations, he added.
This sentiment was also influential amid the expected slowdown in the Indian economy in Q1.
On the other hand, the attractive ratings of some Asian peers and the ongoing stimulus measures undertaken by China are also contributing to the underperformance of the national market. China has now announced a new debt financing plan with a debt increase of 6 trillion yuan from 29.52 trillion yuan aimed at easing pressure on the local government, Nair added.
Nifty50 top losers and gainers
During the week under review, M&M gained nearly 6 percent, followed by Apollo Hospitals, Tech Mahindra, HCL Technologies and TCS which each gained between 4-5 percent.
While, the laggards from the bluechip index were Trent which fell by 12 per cent in the week in earnings, followed by Coal India, Asian Paints, Hindalco, Grasim Industries and Hero MotoCorp which fell between per cent. 5-7.
Top performers and laggards
On a sectoral basis, out of 13 major indices only Nifty IT and Nifty PSU Bank advanced during the week with gains of up to 4 percent and 0.98 percent, respectively. While the laggards include indices like Realty, Energy and FMCG among others. Realty fell sharply during the week by more than 4 percent, while the auto pack remained strong and ended on a low note.
Tailwinds to be aware of
The recent rebound in India’s domestic manufacturing activity is a positive sign. This year government spending is expected to recover and therefore expected improved corporate profits in H2FY25. The holiday season in Q3 is likely to revive consumption, which should support market sentiment and will help in securing space in the near future, Nair added.
Globally, the conclusion of the US election and a strong Republican majority have reduced political uncertainty, providing relief to global markets. The FED’s recent 25 bps interest rate cut, which was in line with expectations, also provides some support.
Markets next week will be guided by big print, Q2 earnings, FII action and policies under Trump leadership.
In the coming week, key economic data points to watch include the Index of Industrial Production (IIP) and inflation. Consensus expects inflation to rise in the short term and IIP to increase. The market will continue to be influenced by Q2 earnings, Trumponomic policies, and the actions of FIIs.
