The week between October 17 and October 21 was largely favourable for Indian markets, despite weak worldwide competitors.
Over the course of the week, the Sensex and Nifty 50 each rose by more than 2% as the results season and the expectation of an acceleration in demand patterns around Diwali lifted sentiment in general.
The Sensex and Nifty 50 both continued their winning streaks for a sixth straight day. Bank stocks outperformed those of their competitors. Stock market activity will be limited to just three days in the following week due to a lengthy holiday for Diwali.
The Nifty 50 ended the day at 17,576.30, up 12.35 points or 0.07%, and the Sensex closed at 59,307.15, up 104.25 points or 0.18%. Industry behemoths including Axis Bank, ICICI Bank, HUL, and Kotak Bank were the top performances as a result of their Q2 results.
Regarding sectoral indices, on October 21 Bank Nifty and BSE Bankex both saw gains of about 684 points and around 949 points, respectively.
But thanks to support from the RBI, stability in domestic markets, and a sustained increase in treasury rates, the rupee rose against the US dollar. Before Friday’s close, the rupee surpassed the 83-mark, or 82.6750 to the dollar.
Over the past six weeks, the value of the local currency has dropped by around 4% in relation to the dollar.
On the other hand, FIIs modified their buying behaviour in this week’s final two trading sessions, with October 20 showing the most buying after keeping a negative taste for equities.
On October 21 and October 20, respectively, FIIs made investments in the stock market totaling 438.89 crore and 1,864.79 crore. There were around Rs. 979.34 crore in FII equities transactions between October 17 and October 19.
The Sensex rose by more than 1,387 points, or 2.4%, during the week of October 17–21, while the Nifty 50 rose by around 391 points, or 2.3%.
This previous week, the market value of the BSE-listed businesses rose by more than 4.13 lakh crores, coming close to 274.42 lakh crores. On October 14, the market cap was about 270.29 lakh billion at the end of the previous week.
According to Vinod Nair, Head of Research at Geojit Financial Services, “despite global concerns, local sentiment remained upbeat ahead of Diwali and the market demonstrated its resilience, supported by a respectable start to the earnings season.”
The benchmark indices have risen over the last six sessions in part due to stock-
the FMCG, financial, and IT sectors in particular. Due to loan growth reaching a 10-year high of 17.94% YoY as of October, the bank nifty rose by 3.8%, while PSU banks rose by 11% during the course of the week.
What to expect in markets week from October 24-28?
On October 24, trade in stocks, futures, commodities, and other instruments will be halted in observance of Lakshi Pujan (the main Diwali).
Trading will be halted on October 26 in observance of the Diwali Balipratipada holiday. Thus, trading will be restricted to October 25, 27, and 28. However, as part of Muhurat trading on October 24, markets will be open from 6:15 p.m. to 7:15 p.m.
According to Nair, considerable profit taking was seen at the end of the week, even though domestic investors kept up their cautious stance in light of the short week.
Concerns of a more aggressive monetary policy by the central bank on the global front heightened after UK inflation rose to a 40-year high of 10.1% in September.
There are no major triggers for the forthcoming week, so the market direction will be dictated by earnings season and the general attitude throughout the world.
“The Indian rupee breached the 83 per dollar barrier for the very first time, on increased dollar demand from petroleum corporations and a widening current account deficit,”
said Mitul Shah, Head of Research at Reliance Securities. The only things that made the situation worse were higher US bond rates and a rising currency.
In relation to the US dollar, the Indian rupee has depreciated by 12% this year. The market is worried that more US Fed rate rises might drive up US Treasury rates, weakening the rupee.
Shah went on to say, “The 2QFY23 financial season has so far witnessed healthy revenue growth, but heightened inflationary pressure had a negative impact on profitability.
Sales at 120/BSE500 companies increased by 23% YoY, while EBITDA increased by 15% YoY and PAT remained essentially flat.”
Shah said “The US economy and the local economy both experience chronically sticky inflation. India’s growth is still robust and is expected to be one of the world’s fastest growing economies, despite the global crisis and downgrading of GDP for major nations.
The market will be watching the US Federal Reserve’s monetary policy meeting on November 2. Commentary on holiday demand, inflation predictions, and rate rises will all be closely watched in the near future.”
During the week of October 24-28, investors should pay close attention to the Q2 earnings of the following firms, among others: Dabur, Tata Chemicals, Indus Tower, SBI Card, REC, and PNB Housing Finance.