The benchmark equity indices ended the last week’s last trading session in the positive territory. The NSE Nifty 50 advanced 97.35 points or 0.51% to settle at 19,230.60, while the BSE Sensex added as much as 282.88 points to 64,363.78.on Friday. On a weekly basis, the NSE Nifty 50 experienced a significant rise of 0.96%, mirroring the BSE Sensex, which also saw a substantial jump of 0.91% last week.
“Nifty managed to hold the support zone of long term moving average i.e. 200 EMA around 18,800 last week however it has reached closer to the resistance zone of multiple moving averages now. We need a decisive close above 19,500 to negate the bearish tone and inch towards 19,850 levels. On the downside, the 18,800-19,000 zone would offer support in case the decline resumes. Meanwhile, we suggest staying focused on stock selection and preferring sectors like energy, FMCG & realty for long trades,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
“The market exhibited a cautious tone at the outset, influenced by the uncertainty surrounding the US Fed’s policy meeting. However, as the week progressed, the apprehension dissipated, and market sentiments rebounded. This turnaround was partly attributed to a modest decline in oil prices, which raised optimism about a potential pause in Fed actions. Furthermore, the market received a boost from stable domestic macroeconomic PMI and robust corporate earnings from domestic companies. These positive factors helped the market recover from its initial losses during the week. Notably, the auto sector faced challenges despite positive auto sales figures, while the mid and small-cap sectors demonstrated noteworthy performance, driven by strong demand and strong economic outlook,” said Vinod Nair, Head of Research at Geojit Financial Services.
Vinod Nair further added that, “Investors will closely scrutinize the economic data from the US, including the PMI and nonfarm payroll releases, to gain further insights into US economic performance. The corporate earnings outlook for H1 has been favourable, and expectations for a positive H2 earnings outlook are high. A positive performance in H2 could lead to potential earnings upgrades. This week, the market is anticipating results from major PSU banks, auto, and metal sectors with an optimistic outlook.”
On Friday, November 3, 2023, the Foreign institutional investors (FII) offloaded shares worth net Rs 12.43 crore, while domestic institutional investors (DII) added shares worth net Rs 402.69 crore, according to the provisional data available on the NSE. On a weekly basis, FIIs sold shares worth net 5,522.38 crore, while DIIs added shares worth net Rs 4,868.25.
“The FII selling trend witnessed in September and October continued in early November, too. In the first three days of November FIIs sold equity for Rs 3063 crores through the cash market.This selling trend is unlikely to continue, going forward, since the main trigger for FII selling, the rising bond yields, has reversed. After peaking at 5% on 19th October the 10-year US bond yield started to decline; during the last two days the decline has been steep, taking the yield down sharply to 4.66% on 3rd November,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The main trigger for this reversal in bond yields is the subtle dovish commentary from the Fed chief Jerome Powell that ‘despite elevated inflation, inflationary expectations remain well anchored.’ The market has interpreted this statement as the end of the rate hiking cycle. That’s why yields have corrected sharply. FII selling is likely to be subdued, going forward. They may even turn buyers, not to miss the rally in the Indian market. Frontline banking, automobiles, capital goods, and mid-caps in IT and real estate are poised to do well,” V K Vijayakumar added.
