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Benchmark Indices ended the week lower after Nifty 50 hits record high for 5th consecutive session. On the weekly basis, indices advanced for the second week with Nifty Closing at record high. Global Indices surged higher amid upbeat outlook for Nvidia. Sectoral indices showed mixed performance with Realty gained the most while IT declined the most. It is expected that the volatility will continue in the coming time period. 

 

Fed decided to keep the rates unchanged and guided that no rate cut would be there until FOMC has confidence that inflation was declining. Fed officials expressed caution about lowering rates too quickly at last meeting expressing both caution on inflation and optimism. It indicated that the Fed’s had successfully reduced the rate of inflation which touched the highest level in mid-2022 in more than 40 years. It is expected that the rate hikes are likely over. 

 

FPI have sold $3.5bn so far in 2024 in Indian markets, but most of these has been offsetted by strong DII inflows, retail investors and high net worth individuals investing in the Indian equities. FII became net seller for financial services shares in first two weeks of Feb selling Rs7536cr after offloading Rs30000cr in Jan month. Investors are cautious on the banking sector due to credit demand moderating and struggle to raise deposits. Another two sectors which came on the seller list for FII are construction and telecom. The sectors which stay bullish for the FIIs are Healthcare, IT, consumer services and auto. It is expected that FIIs flow in India may increase amid strong earnings and investors globally are cautious about Chinese equities.

 

Quarterly earnings for India reported double digit profit growth of 25% over a lower base of 2.2% year ago while revenue in the quarter grew 8.2% YoY vs 17.3% growth year ago. Double digit growth in Net Profit was due to stable input cost and lower interest outgo. The operating margin improved to 17.3% YoY in Q3 reflecting the slowly diminishing of the benefit of benign input cost within single digit revenue growth. Corporate India outlook is looking promising but short-term volatility could be there due to the upcoming general election. 

 

Certain Tailwinds for the upcoming quarter are improved global trade and investments, sustained manufacturing profitability, underlying service resilience, surge in capex in the budget, increase in household demand. Whereas possible headwinds for corporate are challenges related to the availability of raw materials and escalating in prices, soft demand, shortage of skilled labor, increased power costs, market volatility, geopolitical risk.

 

India's stock market extended its winning streak for the second consecutive week, defying selling pressure from foreign institutional investors (FIIs). Despite FIIs withdrawing a significant ?32,15.4 crore from the cash market segment, both the Nifty and Sensex indices scaled new peaks. The benchmark Nifty index hit a fresh all-time high of 22,297.50 before settling the week at 22212.70, marking a 0.78% gain from the previous week, while Bank Nifty also closed the week higher at 46811.75, up nearly 1.0% from the previous week. Buying in index heavyweights like Reliance Industries (RIL), ITC, and banking giants provided crucial support to the market. RIL even hit a new all-time high at 2995.10 during the week. Moreover, optimistic earnings reports from US chipmaker Nvidia and favourable PMI data from the Indian economy boosted overall market sentiment.

 

In Nifty, in the short term, the index can move towards 22,400 and a move above it can take it to 22,700. Support on the lower end is placed at 21,900, while strong support anticipated in the range of 21600-21550. Both price and momentum indicator is suggesting continuation of the positive price action. On the upside immediate hurdle is placed at 22,350 – 22,400.

 

 In Bank Nifty, the weekly chart has taken support from bullish trendline at the levels of 44700-45000, which will act as a strong support for now. Currently stuck in a broad range of 45800-478y00, the index faces limitations on further upside until it surpasses the 47300 mark. 

 

 

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