In this festive week with one less trading session, we expect markets to consolidate in a broader range due to the absence of major events and the July-September earnings season coming to an end. Hindu Samvat 2080 is likely to start on a positive note on the back of strong earnings and healthy economic outlook. On the data front, monthly inflation data from US, UK, Europe and India will be closely watched. Apart from this, investors would also watch for Japan quarterly GDP data and US retail sales data.
Last week marked the end of Samvat 2079, with Nifty gaining around 10% in this period, despite economic headwinds and global geopolitical concerns. Moving into Samvat 2080, we believe India will continue to shine and expect markets to maintain outperformance. Over the next couple of quarters, sector rotation would be an important driver along with the overall market uptrend. We expect sectors like financial services, discretionary consumption, construction and real estate to drive the overall market uptrend.
Last week Nifty started on a positive note and consolidated around the 19,300-19,500 zone. It closed a second consecutive week of gains at 19,425 levels (up 1%) Broader market continued to outperform, with Nifty Mid and Small Cap 100 indices up 2.9% and 3.1%. Most of the sectoral indices closed in green with Pharma (+4.3%), Realty (+2.9%), and Metals (+2.6%) among the major gainers.
On global front, Fed Chair Powell’s commentary was important event during the week. Somewhat hawkish, it indicated the possibility of further rate hikes to combat inflation and led to some selling pressure across global equites on the last day of the week.
Primary market was in action with few known names listing on Indian bourses. While Cello World and ESAF Small Finance made strong debut, listing at a premium of 28% and 20% respectively. Honasa Consumer (Mamaearth) saw a flat start.
Real Estate sector was in limelight after a report released by CBRE showed a 97% rise in sale of luxury homes in India, in the first nine months of 2023 compared to the same period last year. In the top seven cities in India, 9,200 luxury homes were sold this year, compared to 4,700 units last year. Cement sector was also in focus after companies reported healthy Q2 results. Further, expectation of rebound in demand after Diwali, driven by a robust project pipeline in key sectors such as infrastructure, real-estate, and private capex, boosted the sentiments. Niche sectors including oil marketing, tyres and aviation saw buying on account of sharp decline in crude oil prices.
(The author is Head – Retail Research, Motilal Oswal Financial Services Limited)
(Published 12 November 2023, 23:52 IST)