Markets week ahead: Will Sensex, Nifty 50 continue their winning spree?

Despite limited international competition, the week of October 17–October 21 was mostly favourable for Indian markets.

The Sensex and Nifty 50 both increased by more than 2% during the course of the week as the results season and the anticipation of an acceleration in demand patterns around Diwali boosted optimism generally.

For a sixth day in a row, both the Sensex and Nifty 50 maintained gains. Bank stocks did better than those of their rivals. Due to an extended break for Diwali, the next week’s stock market activity will only last three days.

The Sensex closed at 59,307.15, up 104.25 points or 0.18%, and the Nifty 50 closed at 17,576.30, up 12.35 points or 0.07%. As a consequence of their Q2 results, industry giants including Axis Bank, ICICI Bank, HUL, and Kotak Bank had the best performances.

In terms of sectoral indexes, on October 21, Bank Nifty and BSE Bankex both had increases of around 684 points and approximately 949 points, respectively.

The rupee, however, strengthened versus the US dollar as a result of RBI assistance, market stability, and a persistent rise in treasury rates. The rupee reached the 83-mark, or 82.6750 to the dollar, before Friday’s closure.

The local currency’s value has decreased by about 4% during the previous six weeks in compared to the dollar.

However, FIIs changed their purchasing strategy in this week’s last two trading sessions, with October 20 seeing the highest level of buying despite maintaining a sour attitude toward stocks.

FIIs invested a total of 438.89 crore and 1,864.79 crore in the stock market on October 21 and October 20, respectively. Between October 17 and October 19, FII equity transactions totaled about Rs. 979.34 crore.

During the week of October 17–21, the Sensex increased by more than 1,387 points, or 2.4%, while the Nifty 50 increased by around 391 points, or 2.3%.

The market value of the companies listed on the BSE increased by more than 4.13 lakh crores the previous week, approaching 274.42 lakh crores. At the conclusion of the previous week on October 14, the market capitalization was around 270.29 lakh billion.

“Despite global concerns, local mood remained buoyant ahead of Diwali and the market displayed its durability, buoyed by a decent start to the earnings season,” says Vinod Nair, Head of Research at Geojit Financial Services.

Over the past six sessions, the benchmark indexes have increased in part because of stock-

especially in the FMCG, banking, and IT industries The bank nifty increased by 3.8% as a result of loan growth reaching a 10-year high of 17.94% YoY as of October, while PSU banks increased by 11% during the course of the week.

What to expect in markets week from October 24-28?

In honour of Lakshi Pujan, trading in stocks, futures, commodities, and other instruments will cease on October 24. (the main Diwali). On October 26, trading will be suspended in honour of the Diwali Balipratipada holiday.

Trading will thus be prohibited on October 25, 27, and 28. On October 24, however, markets will be open from 6:15 p.m. to 7:15 p.m. as part of Muhurat trading.

Nair claims that despite domestic investors maintaining their cautious position due to the short week, there was a significant amount of profit taking at the conclusion of the week.

After UK inflation reached a 40-year high of 10.1% in September, worries of a more aggressive monetary policy by the central bank on the global front increased.

The market’s course will be determined by earnings season and the global mood as there are no significant triggers for the upcoming week.

According to Mitul Shah, Head of Research at Reliance Securities, “the Indian rupee surpassed the 83 per dollar barrier for the very first time, on rising dollar demand from petroleum firms and a widening current account deficit.”

The only factors that worsened the situation were a rising currency and increased US bond rates. The Indian rupee has lost 12% of its value this year against the US dollar.

The market is concerned that further increases in US Fed rates might push up US Treasury rates and weaken the rupee.

Then, Shah said, “Healthy revenue growth has been observed thus far in the 2QFY23 financial season, but increased inflationary pressure had a detrimental effect on profitability.

Sales rose by 23% YoY at 120/BSE500 businesses, while EBITDA rose by 15% YoY and PAT remained practically constant.”

stated Shah “Both the US economy and the regional economy deal with persistently sticky inflation. Despite the global financial crisis and the downgrade of GDP for major countries, India’s growth is still strong and is anticipated to be one of the fastest growing economies in the world.

On November 2, the US Federal Reserve will meet to discuss its monetary policy. The market will be watching. In the near future, analysts’ estimates of inflation, rate increases, and Christmas demand will all be heavily scrutinised.”

Investors should pay particular attention to the Q2 earnings of the following companies, among others: Dabur, Tata Chemicals, Indus Tower, SBI Card, REC, and PNB Housing Finance during the week of October 24-28.

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