The Indian stock markets soared to new peaks this week, driven by strong monsoon rains, optimism surrounding the forthcoming festive season, and anticipations of a possible rate cut by the U.S. Federal Reserve.
Despite quick overbought situations indicating possible range-bound trading in future, the market opinion remains mostly positive.
Weekly Market Performance
- BSE Sensex: Climbed 1,707.01 points (+2.10%) to close at 82,890.94.
- Nifty50 Index: Increased by 504.35 points (+2.02%) to settle at 25,356.50.
- Record Highs Achieved on September 12:
- BSE Sensex: Reached 83,116.19.
- Nifty50: Hit 25,433.35.
Broader Indices Overview
| Index | Weekly Gain (%) |
|---|---|
| BSE Smallcap | +2.00% |
| BSE Largecap | +2.00% |
| BSE Midcap | +1.50% |
Sectoral Performance
Most sectors ended the week on a positive note, with gains in many different indices:
Top Gainers:
- Nifty FMCG
- Nifty Information Technology
- Nifty Media: Each of these indices saw an approximate gain of 3%.
- Only Decliner
- Oil & Gas Sector: Dropped by 2.6%.
Investor Activity
Foreign Institutional Investors (FIIs):
- Weekly Purchases: Bought equities worth ₹15,199.6 crore.
- Monthly Total: Accumulated purchases of ₹16,600.88 crore so far.
Domestic Institutional Investors (DIIs):
- Weekly Purchases: Acquired equities totaling ₹2,444.19 crore.
- Monthly Total: Bought equities worth ₹7,990.18 crore to date.
Analyst Insights
Vinod Nair, Head of Research at Geojit Financial Services, observed:
“The Indian markets have rebounded impressively from last week’s downturn caused by SEBI’s FII disclosure deadlines and U.S. recession fears. While initial caution was driven by key macroeconomic indicators, such as U.S. inflation rates, jobless claims, and domestic manufacturing data, the market regained confidence. Comments from the Bank of Japan about potential rate hikes added to the initial apprehension.”
He added that steady foreign and domestic institutional investments, combined with a strong monsoon and anticipated festive demand, have bolstered investor sentiment. The slight easing of U.S. inflation and cooling job market, alongside steady Indian inflation and an uptick in July’s Index of Industrial Production (IIP), have further fueled market optimism.
Top Performers in the BSE Smallcap Index
Stocks with 20-30% Gains:
- Hardwyn India
- Panacea Biotec
- Sadhana Nitrochem
- Cressanda Solution
- Renaissance Global
- Jubilant Pharmova
- Sundaram-Clayton
- Zaggle Prepaid Ocean Services
- Ester Industries
- Century Textiles and Industries
Stocks with 7-21% Losses:
- Abans Holdings
- Granules India
- MPS
- VST Industries
- TV Today Network
- Jagran Prakashan
- Cera Sanitaryware
- Phoenix Mills
- Ddev Plastiks Industries
Market Outlook
Amol Athawale, VP-Technical Research at Kotak Securities, shared his perspective:
“The short-term market trend is positive; however, due to temporary overbought conditions, we might witness range-bound movements soon. Key support levels to watch are 25,225-25,000 for the Nifty50 and 82,500-82,000 for the Sensex. On the upside, resistance levels are at 25,500-25,700 and 83,500-84,000. A decline below 25,000 or 82,000 could jeopardize the current uptrend.”
Regarding the Bank Nifty, Athawale noted:
“As long as the Bank Nifty trades above its 50-day Simple Moving Average (SMA) of 51,350, the bullish momentum is expected to persist, potentially reaching 52,250-52,700. Falling below this SMA might prompt traders to exit long positions.”
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, echoed similar sentiments:
“The market’s price action aligns with our expectations and may continue in the next few sessions. The underlying tone is bullish, and we anticipate the uptrend to resume after this consolidation phase. The Nifty50 is likely to target 25,500-25,700, with support around 25,200–25,150.”
Gedia also highlighted the Bank Nifty:
“Positive crossovers on daily and hourly momentum indicators support an upward move. The 52,000 level is a significant resistance point. Surpassing it could trigger a rally towards 52,500–52,600, while immediate support lies between 51,500–51,400.”
Factors Influencing the Market
- Global Economic Indicators: Forecast of the forthcoming Federal Open Market Committee (FOMC) meeting. Anticipations of possible rate cuts by the European Central Bank (ECB) and the U.S. Federal Reserve.
- Domestic Developments: Corporate earnings for Q2 are projected to show progress on a quarter-on-quarter basis. Strong monsoon rains raise agricultural output and rural demand.
- Investor Sentiment: Positive because of the festive season approaching, showing to increased consumer spending. Stable inflation rates and boosting industrial production data.
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Disclaimer
This article is intended for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research or consult a qualified financial advisor before making investment decisions. The author and publisher are not liable for any losses or damages arising from the use of this information.
