Weekly Market Outlook “29 SEP 2024”
The rally in the market continued this week, with the Nifty 50 reaching a new milestone, closing above 26,000 for the first time. Large-cap stocks led the charge, showing solid momentum.
Let’s take a closer look at the key highlights from the past week.
Global Macro Factors🌍
Global macro factors were largely positive:
Crude Oil: Fell sharply and is now trading near the $72 mark, providing some relief to the markets.
Gold: Continued its steady climb, rising by 0.67% this week, and is now trading above $2,680, indicating ongoing investor interest.
Dollar Index: Declined by 0.49%, now hovering near the 100 level.
USD/INR: The rupee weakened slightly, with USD/INR rising by 0.20%.
US 10-Year Treasury Yield: Remained flat at 3.75%, showing stability in the bond market.
On the domestic front, India’s forex reserves surged by $2.8 billion, reaching a record high of $692.3 billion, according to the Reserve Bank of India (RBI).
In global equities, the S&P 500 gained 0.34% this week, maintaining a firm position above the 5,700 level.
Market Performance📈
This week saw another strong performance from the broader market, although gains were mostly concentrated in large-cap stocks. The mid-cap and small-cap segments showed signs of weakness.
Nifty 50: Rose by 1.50% for the week.
Nifty 100: Gained 1.61%, leading among broader market indices.
Nifty 500: Increased by 1.22%.
Nifty Midcap 100: Managed a modest rise of 0.29%.
Nifty Smallcap 100: Ended the week in the red, down 0.47%.
Top stock performers:
BPCL: Led the Nifty 50 with a weekly gain of 10.9%.
Vedanta: Topped both the Nifty 100 and Nifty 500 with a 14.01% surge.
Tata Elxsi: Emerged as the best performer in the Nifty Midcap 100.
CEAT: Topped the Nifty Smallcap 100.
Sector Analysis📊
This week’s sectoral performance was strong, with almost all sectors (except FMCG) ending the week in positive territory. Eight sectoral indices gained at least 2%, signaling robust market sentiment.
We witnessed early signs of sector rotation, with fresh buying in PSE, PSU Banks, Metals, Auto, and Energy stocks. These sectors had lagged in recent months, but are now showing signs of a potential comeback.
Nifty Metal: Was the top sectoral gainer, spiking 7.02%.
Nifty PSE: Followed with a 5.11% rise.
IT stocks: Showed renewed strength on Friday after Accenture’s positive earnings report.
Market Breadth
Market breadth, measured by the percentage of Nifty 500 stocks trading above their 50-day Exponential Moving Average (EMA), remained steady at 61.80%—nearly unchanged from last week’s 60.60%. Typically, a range of 40-70% is considered healthy. However, the fact that this indicator has stayed flat despite a strong index rally could suggest that the broader market is nearing saturation.
Outlook for the Coming Week
We are starting to observe signs of exhaustion in the mid-cap and small-cap segments. The market has enjoyed a continuous rally in recent weeks, but caution is warranted. It’s essential to maintain strict risk management strategies and avoid complacency.
In the week ahead, focus on IT, FMCG, and Pharma stocks. The recent rate cuts in the USA could provide a tailwind for IT and Pharma sectors.
Stay vigilant, manage your risks, and continue riding the wave of this bullish market—just make sure you have safety measures in place!
HAPPY TRADING!