Weekly Market Outlook “22 SEP 2024”
This week, the markets continued their upward momentum with a strong rally in the indices. The Nifty 50 hit a new all-time high, closing above the 25,700 mark for the first time. Notably, Foreign Institutional Investors (FIIs) bought more than Rs. 14,000 crore worth of equity on Friday, further boosting market sentiment.
Now, let’s dive into the key data points from the past week.
Global Macro Factors🌍
Global macro factors were mostly neutral this week:
Crude Oil: Recovered from historic lows and is now trading around the $74 mark.
Gold: Continued its bullish trend, gaining 2.34% and now trading at $2,637.90. The charts suggest that gold remains strong.
Dollar Index: Declined by 0.39%, now hovering near 100.
USD/INR: The rupee strengthened, as the USD/INR fell by 0.57%.
US 10-Year Treasury Yield: Rose to 3.75%, up from 3.65% last week.
The big news globally was the U.S. Federal Reserve’s decision to cut interest rates for the first time since the COVID-19 pandemic. While the rate cut was widely expected, the 0.5% reduction surprised some investors. The S&P 500 responded positively, rallying by 1.55% and closing above the 5,700 level.
Market Performance📈
This week saw continued market strength, although there was some volatility. Most broader market indices ended the week in the green, except for the Nifty Smallcap 100, which saw a decline.
Nifty 50: Gained 1.71%, making it the top performer among broader indices.
Nifty 100: Rose by 1.52%.
Nifty 500: Increased by 1.11%.
Nifty Midcap 100: Saw a modest rise of 0.29%.
Nifty Smallcap 100: Ended the week in red, falling by 0.89%.
In terms of individual stocks:
ICICI Bank was the top gainer in the Nifty 50, with a weekly gain of 7.95%.
Adani Green led the Nifty 100 names.
BSE Ltd. was the standout performer in the Nifty 500 and Nifty Midcap 100, with a huge rally of 36.35%.
HSCL topped the Nifty Smallcap 100 list, gaining 11.79% for the week.
Sector Analysis📊
Sectoral performance was mixed this week. We saw some profit booking in IT and Pharma, while other sectors showed strength. Five sectoral indices posted gains of over 2%.
Nifty Realty made a strong comeback, emerging as the week’s top gainer with a 4.55% rise.
Banking and Finance stocks also saw a good rally. These sectors have underperformed over the last 12 months, but the recent surge in FII buying could bring renewed strength to these stocks.
Market Breadth:
Market breadth, which we measure by the percentage of Nifty 500 stocks trading above their 50-day EMA, declined to 60.60% this week, compared to 66.20% last week. A range of 40-70% is generally considered healthy, but the drop, despite the index rally, may indicate a saturation in the broader market.
Sectors to Watch
For the coming week, keep a close eye on IT, FMCG, and Pharma. Both IT and Pharma stand to benefit from the U.S. rate cuts. Additionally, consumption-focused sectors, including FMCG, could continue to perform well.
HAPPY TRADING!