In the ever-fluctuating landscape of the Indian stock market, the past week witnessed a temporary pause after seven consecutive weeks of an unstoppable rally. While the Nifty 50 and S&P BSE Sensex experienced a marginal dip, several key sectors and stocks displayed resilience, reflecting the underlying strength of the market.
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Indian stock Market: The Week in Review
The Nifty 50, despite achieving a new all-time high of 21,593 points, closed the week with a marginal dip of 0.50%, settling at 21,349 points. In a similar vein, the S&P BSE Sensex saw a 0.53% decline from its historic high of 71,913 points to close at 71,106. Sector-wise Nifty PSU Bank, Nifty Media, Nifty Auto, Nifty Metal, and Nifty Bank saw decreases ranging from 1% to 3.08%, while Nifty FMCG, Nifty Oil & Gas, and Nifty Pharma saw gains of more than 1%.
Indian Stock market Performances:
Nineteen out of the Nifty 50 members ended the week with a gain. Britannia Industries led with a 5% rally, followed by Nestle India, TCS, Coal India, Cipla, and HUL, recording gains between 2% and 4%. Reliance Industries shares posted a notable gain of 2.79%, marking their strongest weekly performance since July 2023. Stocks like Wipro, Hindalco Industries, and IndusInd Bank achieved new 52-week highs, reflecting the diverse movements within the market.
Foreign Portfolio Investments (FPIs) and Market Insights:
NSDL data showed that FPIs infused about ₹24,546 crore in the Indian financial market in November, and in December so far, this figure has surged to ₹77,388 crore. According to Vinod Nair, Head of Research at Geojit Financial Services, the ‘buy on dips’ strategy remains prevalent, with mid and small caps benefiting from eased oil prices and anticipation of a potential rate cut in CY24. Factors such as slower-than-expected US GDP growth and weakness in the dollar signal early rate cuts, supporting the positive trend.
Crude Oil Prices and Global Impact:
In a global context, crude oil prices witnessed their most substantial weekly increase since October. The escalation of Houthi attacks on ships in the Red Sea disrupted global trade, prompting rerouting around the Cape of Good Hope. Due in part to this geopolitical unrest, Brent crude futures saw a 3.45% increase, closing at $79.19 per barrel, while WTI saw a 2.48% increase, closing at $73.56 per barrel. Notwithstanding this brief rebound, rising production from the US and other regions is expected to cause both Brent and WTI to decline annually for the first time since 2020, undermining OPEC’s attempts to keep the market stable.
Bullish Outlook for 2024:
Despite the brief pause, the market outlook remains optimistic for 2024. ICICI Securities forecasts a trajectory similar to 2023, setting a target of 24,200 for the Nifty 50. Axis Securities, under its base case scenario, sets a December 2024 Nifty target at 23,000, considering political stability and policy continuity post the 2024 general elections. Goldman Sachs has upgraded the Nifty 50 target to 21,800 by December 2024, citing robust earnings growth in Q2 and favorable valuations.
In conclusion, the recent pause in the Indian market after seven weeks of a relentless rally signifies a moment of reflection amid various domestic and global factors. As we navigate through the uncertainties, the bullish outlook for 2024, coupled with strategic recommendations from market experts, provides investors with valuable insights to make informed decisions in the dynamic world of finance.
Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.