WHAT EXPLAINS THE SELL-OFF ON FRIDAY?
The massive sell-off on Friday was somewhat surprising considering that the data flows were positive and even the FPIs were net buyers in the week to the tune of $1,641 Million in Indian equities. The Friday sell-off was so sharp that it wiped out the entire gains of the week, leading to the Nifty and Sensex closing virtually flat for the week. Here are 3 things to note about the stock market performance in the week.
The next big thing to watch is whether FPI inflows sustain in the coming week and if fresh allocations to India are positive.
WHAT SHOULD EQUITY MARKETS TRACK NEXT WEEK?
The coming week has some key data points to watch out for. Here are 5 data points that will be closely tracked by the markets in the coming week.
Apart from the above, the next week will also track the FPI flows, fresh allocations as well as the wholesale inflation data.
BSE SENSEX 30 INDEX – FINALLY CROSSES 75,000 IN THE WEEK
The table captures the movement of the BSE SENSEX 30 for the week to April 12, 2024.
Date | Open | High | Low | Close |
12-Apr-24 | 74,889.64 | 74,951.88 | 74,189.31 | 74,244.90 |
11-Apr-24 | 74,953.96 | 75,105.14 | 74,807.55 | 75,038.15 |
10-Apr-24 | 74,953.96 | 75,105.14 | 74,807.55 | 75,038.15 |
09-Apr-24 | 75,124.28 | 75,124.28 | 74,603.37 | 74,683.70 |
08-Apr-24 | 74,555.44 | 74,869.30 | 74,410.07 | 74,742.50 |
05-Apr-24 | 74,287.02 | 74,361.11 | 73,946.92 | 74,248.22 |
Weekly Returns | +0.00% |
Data Source: BSE
Sensex closed just 2 points higher. You can say it was an absolutely flat close. Sensex touched a high of 75,124, but closed the week at 74,245 levels after the sharp sell-off on Friday. The Sensex did cross the 75,000 mark on 2 out of the 4 trading sessions during the week. Overall, Sensex gained just 2 points this week, with most of the gains offset on Friday. The real action on the BSE was on the smaller stocks, not on the Sensex stocks.
NIFTY 50 INDEX – CLOSES FLAT AFTER FRIDAY SELL-OFF
The table captures the movement of Nifty 50 index in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 22,677.40 | 22,726.45 | 22,503.75 | 22,519.40 |
11-Apr-24 | 22,720.25 | 22,775.70 | 22,673.70 | 22,753.80 |
10-Apr-24 | 22,720.25 | 22,775.70 | 22,673.70 | 22,753.80 |
09-Apr-24 | 22,765.10 | 22,768.40 | 22,612.25 | 22,642.75 |
08-Apr-24 | 22,578.35 | 22,697.30 | 22,550.35 | 22,666.30 |
05-Apr-24 | 22,486.40 | 22,537.60 | 22,427.60 | 22,513.70 |
Weekly Returns | +0.03% |
Data Source: NSE
Nifty closed the week with gains of just 6 points, despite FPIs net buying $1,641 Million in equities during the week. FPI inflows in the current week were twice the outflows in the previous 3 weeks. In terms of sectoral show; oil & gas and IT showed smart gains, while IT and FMCG were under pressure. However, with VIX at the level of 11.5, the risks are not too high and it remains a buy on dips market. Q4 results will hold the key to Nifty journey.
NIFTY NEXT 50 INDEX – NOT AS FLAT AS THE NIFTY
The table captures the movement of Nifty Next 50 for the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 63,377.30 | 63,735.35 | 62,987.60 | 63,067.85 |
11-Apr-24 | 63,030.90 | 63,460.85 | 63,020.10 | 63,325.45 |
10-Apr-24 | 63,030.90 | 63,460.85 | 63,020.10 | 63,325.45 |
09-Apr-24 | 63,240.00 | 63,256.50 | 62,500.15 | 62,794.05 |
08-Apr-24 | 63,097.50 | 63,242.85 | 62,861.35 | 62,993.60 |
05-Apr-24 | 62,209.65 | 62,734.75 | 62,019.30 | 62,696.10 |
Weekly Returns | +0.59% |
Data Source: NSE
The Nifty Next 50 is positioned somewhere between Nifty and the smaller stocks. In a market where Nifty is more about Beta and smaller stocks are about risky alpha, Nifty Next-50 offers the perfect middle path. This week, the index gained +0.59%. The Nifty Next 50 is the list of 50 companies with potential to become Nifty companies in the near future. During the week, Nifty Next-50 touched a high of 63,735 levels but closed at 63,068; largely due to the sharp Friday sell-off. The Next 50 gained 372 points during the week.
NIFTY MID-CAP 100 INDEX – MID-CAPS FAIL TO FLATTER THE STREET
The table captures the movement of Nifty Mid-Cap 100 in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 50,339.20 | 50,590.20 | 50,022.05 | 50,067.55 |
11-Apr-24 | 50,075.40 | 50,443.15 | 49,963.20 | 50,380.40 |
10-Apr-24 | 50,075.40 | 50,443.15 | 49,963.20 | 50,380.40 |
09-Apr-24 | 50,279.10 | 50,309.60 | 49,744.15 | 49,894.70 |
08-Apr-24 | 50,355.55 | 50,361.05 | 49,760.25 | 50,041.40 |
05-Apr-24 | 49,791.75 | 50,058.55 | 49,678.75 | 50,022.85 |
Weekly Returns | +0.09% |
Data Source: NSE
In the last few weeks, the Nifty Mid-Cap 100 had shown smart gains and recovered from the tax farming sell-off in March. However, in the latest week, the mid-cap index gained just about 45 points, but managed to close the week above the 50,000 mark. In the light of the frenetic gains in mid-caps in the last 3 weeks, this week may be called relatively tepid. Mid-cap stocks also tend to be vulnerable to high crude prices and volatility in the USDINR, and that is likely to be an overhang on the mid-sized stocks in the coming weeks.
NIFTY SMALL-CAP 100 INDEX – BEST AMONG THE GENERICS
The table captures movement of Nifty Small Cap 100 in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 16,562.45 | 16,653.30 | 16,473.95 | 16,496.40 |
11-Apr-24 | 16,500.05 | 16,593.10 | 16,403.75 | 16,571.40 |
10-Apr-24 | 16,500.05 | 16,593.10 | 16,403.75 | 16,571.40 |
09-Apr-24 | 16,508.60 | 16,556.75 | 16,357.45 | 16,451.90 |
08-Apr-24 | 16,466.80 | 16,485.60 | 16,360.25 | 16,407.05 |
05-Apr-24 | 16,229.25 | 16,375.55 | 16,171.05 | 16,355.35 |
Weekly Returns | +0.86% |
Data Source: NSE
The small cap index rallied for the fourth week in a row. It seems to have put the devils of March behind. After gaining around 10% in the last 3 weeks, the small cap index added another 86 bps to its rally. With this rally, the small cap index has recouped most of its losses in the last two months of fiscal year 2024. While valuation concerns remain on small cap stocks, the retail interest continues to be in these stocks. With massive financialization of savings, the preference for small caps is here to stay.
BANK NIFTY INDEX – RECORDS MARGINAL GAINS FOR THE WEEK
The table below captures the movement of BANKNIFTY in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 48,671.20 | 48,882.65 | 48,477.55 | 48,564.55 |
11-Apr-24 | 48,879.55 | 49,057.40 | 48,669.25 | 48,986.60 |
10-Apr-24 | 48,879.55 | 49,057.40 | 48,669.25 | 48,986.60 |
09-Apr-24 | 48,810.80 | 48,960.75 | 48,568.25 | 48,730.55 |
08-Apr-24 | 48,586.75 | 48,716.95 | 48,424.65 | 48,581.70 |
05-Apr-24 | 48,104.65 | 48,557.40 | 47,894.50 | 48,493.05 |
Weekly Returns | +0.15% |
Data Source: NSE
After the stellar gains of 2.9% returns in the previous week on the Bank Nifty, the current week was a lot more subdued with just 15 bps rise in the week. Like the Nifty and the Sensex, the Bank Nifty also saw a sharp sell-off on Friday after Fed looked very likely to delay rate cuts to September 2024. The one concern for banks has been the rapid growth in the C/D ratio, which means they may have to offer higher rates on deposits.
NIFTY IT INDEX – OVERHANG CONTINUES AHEAD OF Q4 RESULTS
The table captures the movement of Nifty IT index in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 35,222.55 | 35,363.60 | 34,980.85 | 35,018.10 |
11-Apr-24 | 35,191.15 | 35,350.60 | 34,952.25 | 35,293.15 |
10-Apr-24 | 35,191.15 | 35,350.60 | 34,952.25 | 35,293.15 |
09-Apr-24 | 35,241.90 | 35,568.80 | 35,002.80 | 35,079.35 |
08-Apr-24 | 35,381.00 | 35,429.95 | 35,018.60 | 35,064.15 |
05-Apr-24 | 35,331.80 | 35,371.10 | 35,146.50 | 35,247.90 |
Weekly Returns | -0.65% |
Data Source: NSE
The IT index has been volatile in the last few weeks, but this week it again came under pressure and gave up 65 bps for the week. The sell-off in IT stocks came after the tepid guidance by Accenture. However, with TCS giving out good numbers, the true picture of IT companies will be out with the Q4 results. One must not forget that that Indian IT industry has a natural advantage of flexibility, adaptability, and pricing over global peers. However, there are concerns that IT spending could take a hit in 2024.
NIFTY OIL & GAS INDEX – BOUNCES FROM WINDFALL TAX WORRIES
The table captures the Nifty Oil & Gas index for the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 11,787.75 | 11,818.75 | 11,629.45 | 11,647.75 |
11-Apr-24 | 11,649.30 | 11,858.65 | 11,644.70 | 11,793.05 |
10-Apr-24 | 11,649.30 | 11,858.65 | 11,644.70 | 11,793.05 |
09-Apr-24 | 11,709.00 | 11,717.60 | 11,573.15 | 11,618.70 |
08-Apr-24 | 11,545.10 | 11,705.15 | 11,543.30 | 11,670.50 |
05-Apr-24 | 11,466.20 | 11,538.00 | 11,371.35 | 11,503.65 |
Weekly Returns | +1.25% |
Data Source: NSE
Last week, oil & gas stocks were muted due to the windfall tax concerns, but that is behind now. There are concerns over oil price volatility in the Brent markets but what should favour oil stocks is that oil prices look all set to remain robust for some time now. That is likely to be positive for the upstream oil companies and for the oil refiners, which constitute the bulk of the Indian oil & gas market cap.
NIFTY AUTO INDEX – STILL EXPECTING A SURPRISE RATE CUT
The table captures the movement of Nifty Auto index in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 21,985.80 | 22,076.20 | 21,834.45 | 21,851.30 |
11-Apr-24 | 22,081.45 | 22,148.85 | 21,920.80 | 21,985.15 |
10-Apr-24 | 22,081.45 | 22,148.85 | 21,920.80 | 21,985.15 |
09-Apr-24 | 22,185.80 | 22,238.25 | 21,921.65 | 21,999.35 |
08-Apr-24 | 21,662.15 | 22,102.05 | 21,642.90 | 22,067.95 |
05-Apr-24 | 21,597.85 | 21,651.35 | 21,539.25 | 21,600.90 |
Weekly Returns | +1.16% |
Data Source: NSE
The Nifty Auto Index had gained 7% in last 3 weeks and this week it added another 116 bps of gains. Even as the US Fed has been ambivalent, the rate sensitives are hoping that the RBI may surprise with a rate cut earlier. RBI policy indicates that the RBI may not consider rate cuts till the full budget is presented in July 2024. However, the auto sector continues to stay optimistic on this front.
NIFTY FMCG INDEX – CRUDE OVERHANG SPOOKS FMCG STOCKS
The table captures the movement of Nifty FMCG index in the week to April 12, 2024.
Date | Low | High | Low | Close |
12-Apr-24 | 54,244.45 | 54,275.60 | 53,653.45 | 53,701.40 |
11-Apr-24 | 53,869.60 | 54,370.50 | 53,601.35 | 54,290.90 |
10-Apr-24 | 53,869.60 | 54,370.50 | 53,601.35 | 54,290.90 |
09-Apr-24 | 54,081.10 | 54,091.35 | 53,552.65 | 53,629.35 |
08-Apr-24 | 54,100.25 | 54,228.90 | 53,902.45 | 53,966.05 |
05-Apr-24 | 53,718.20 | 54,094.50 | 53,569.65 | 53,925.95 |
Weekly Returns | -0.42% |
Data Source: NSE
The FMCG sector has been under consistent pressure in recent week. The latest week saw FMCG sector losing another 42 bps. FMCG may be a good defensive bet and consumption proxy, but there are concerns too. Weak rural demand and higher crude prices are playing spoilsport in the FMCG rally. With rising geopolitical tensions in the Middle East and West Asia, crude prices are the primary concern for FMCG stocks.
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