Weekly Musings – Index performance for week ended December 06, 2024

10 Dec 2024 , 12:12 PM

FRONTLINE INDICES GAIN AMIDST REVIVAL IN FPI FLOWS

It was not a great week to begin with. The GDP growth had come in at 5.4% for Q2FY25 and it was already clear that the monetary policy was unlikely to cut rates in the light of high inflation. However, the big positive in the week was the surge in FPI inflows. At $2,886 Million, it marked a sharp turnaround in FPI sentiments after nearly 7 weeks of persistent FPI selling. Despite the GDP growth in Q2FY25 falling to just 5.4%, the markets took solace from the assurance of the Finance Minister that growth would revive with capex in Q3. Also, the GDP deflator is also expected to moderate, leading to improved real GDP growth rate. The markets were also impressed by the 50 bps cut in the cash reserve ratio (CRR), which is likely to release close to ₹1.17 Trillion of liquidity into the system.

However, one thing is clear that FY25 is a year when the markets have to be prepared for higher than expected inflation and lower than expected GDP growth. On inflation, the inflation estimate has been raised to 4.8%, although 5.0% looks more realistic, even assuming that inflation tapers in the last two quarters of FY25. Also, the GDP growth estimate has been cut by 60 bps to 6.6%, although the actual growth rate may be closer to 7% if the GDP deflator impact is adjusted for. However, the global situation remains fluid. Even as oil prices have tapered, the unrest in Syria is likely to change the equations once again in the Middle East and West Asia. Markets must be prepared for a tough FY25.

BSE SENSEX 30 INDEX – FPI FLOWS GIVE MUCH NEEDED BOOST

The table captures the movement of the BSE SENSEX 30 for the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	81,887.54	81,925.91	81,506.19	81,709.12
05-Dec-24	81,182.74	82,317.74	80,467.37	81,765.86
04-Dec-24	81,036.22	81,245.39	80,630.53	80,956.33
03-Dec-24	80,529.20	80,949.10	80,244.78	80,845.75
02-Dec-24	79,743.87	80,337.82	79,308.95	80,248.08
29-Nov-24	79,032.99	79,923.90	79,026.18	79,802.79
		Weekly Returns		+2.39%

Data Source: BSE

A sharp 1,906 points rally in the BSE Sensex resulted in a smart close with 239 basis points gains for the week. The undertone of the Sensex was largely driven by the strong FPI inflows of $2.89 Billion during the week. For the week, Sensex touched a high of 82,318 and a low of 80,338; closing just above the psychological level of 82,000.

NIFTY 50 INDEX – GAINING FROM THE CRR LIQUIDITY EFFECT

The table captures the movement of Nifty 50 index in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	24,729.45	24,751.05	24,620.50	24,677.80
05-Dec-24	24,539.15	24,857.75	24,295.55	24,708.40
04-Dec-24	24,488.75	24,573.20	24,366.30	24,467.45
03-Dec-24	24,367.50	24,481.35	24,280.00	24,457.15
02-Dec-24	24,140.85	24,301.70	24,008.65	24,276.05
29-Nov-24	23,927.15	24,188.45	23,927.15	24,131.10
		Weekly Returns		+2.27%

Data Source: NSE

It was a week of smart gains for the Nifty 50 at 227 basis points or 567 points for the week. All sectors were in the positive except for a marginal fall in the FMCG index. Banks gained from the liquidity surge post the CRR cut. VIX hovered in the range of 13-14 during the entire week, although lower levels will be needed for buy on dips. Thanks to FPI buying, during the week, the Nifty touched a high of 24,858 and a low of 24,009 levels.

NIFTY MID-CAP 100 INDEX – STEADY RECOVERY IN MID-CAPS

The table captures the movement of Nifty Mid-Cap 100 in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	58,571.70	58,768.75	58,307.55	58,704.60
05-Dec-24	58,448.25	58,516.60	58,023.50	58,441.55
04-Dec-24	57,734.70	58,158.80	57,621.80	58,112.40
03-Dec-24	57,370.15	57,543.00	57,242.45	57,509.00
02-Dec-24	56,400.65	57,060.65	56,227.15	57,000.85
29-Nov-24	56,339.55	56,532.05	56,116.85	56,392.65
		Weekly Returns		+4.10%

Data Source: NSE

It was a week of steady value build-up for the Nifty Mid-Cap 100 with gains of 410 basis points or 2,312 points for the week. Low oil prices and a steady rupee also helped these mid-cap stocks during the week. There was a mix of retail and institutional buying in mid-cap stocks. For the week, Nifty Mid-Cap 100 touched a high of 58,769 and low of 57,227.

NIFTY SMALL-CAP 100 INDEX – ALPHA HUNTING BACK IN RIGHT EARNEST

The table captures movement of Nifty Small Cap 100 in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	19,377.55	19,514.90	19,285.90	19,492.10
05-Dec-24	19,259.65	19,352.90	19,202.50	19,333.55
04-Dec-24	19,077.50	19,199.35	19,008.35	19,173.55
03-Dec-24	18,904.15	19,033.00	18,894.45	19,003.55
02-Dec-24	18,666.80	18,853.85	18,593.75	18,845.05
29-Nov-24	18,546.05	18,666.15	18,491.55	18,650.95
		Weekly Returns		+4.51%

Data Source: NSE

Nifty Small Cap 100 index gained 451 basis points or 841 points for the week. Alpha hunting was there with retail and institutions piling on smaller names. This week, the Nifty Small Cap index touched a high of 19,515 levels and a low of 18,594. The small cap index also gained this week from lower crude oil prices and a steady to strong Indian rupee.

BANK NIFTY INDEX – BANKS GET A POLICY LIQUIDITY BOOST

The table below captures the movement of BANKNIFTY in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	53,634.20	53,868.50	53,160.65	53,509.50
05-Dec-24	53,354.45	53,888.30	52,850.35	53,603.55
04-Dec-24	52,775.00	53,387.10	52,685.15	53,266.90
03-Dec-24	52,357.95	52,780.90	52,216.85	52,695.75
02-Dec-24	52,087.65	52,197.25	51,693.95	52,109.00
29-Nov-24	51,984.15	52,170.90	51,759.45	52,055.60
		Weekly Returns		+2.79%

Data Source: NSE

Even before the policy was announced, it was almost apparent that the RBI would leave rates alone and cut CRR by 50 bps. The infusion of ₹1.17 Trillion boosted banking stocks. For the week, Bank Nifty was up 279 basis points or 1,454 points. While the liquidity sentiments boosted banks, NIMs are a concern amidst rising cost of deposits. During the week, Bank Nifty touched a high of 53,888 and a low of 51,694 levels.

NIFTY IT INDEX – BEST BET AGAINST RUPEE VOLATILITY

The table captures the movement of Nifty IT index in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	44,780.45	44,852.30	44,519.70	44,716.05
05-Dec-24	44,174.80	45,027.95	44,023.90	44,806.40
04-Dec-24	43,761.15	44,225.55	43,585.05	43,949.25
03-Dec-24	43,794.70	43,811.50	43,404.00	43,754.95
02-Dec-24	43,171.75	43,578.00	42,860.80	43,547.00
29-Nov-24	42,873.80	43,468.95	42,738.75	43,146.25
		Weekly Returns		+3.64%

Data Source: NSE

After gaining 7.3% in the last 3 weeks, the IT sector gained another 364 basis points this week, or about 1,570 points. IT stocks corrected on Friday. IT sector has gained from dollar strength, Trump 2.0, and hopes that tech spending will revive. During the week, Nifty IT index touched a high of 44,852 and low of 42,861 levels, making higher highs and lows.

NIFTY OIL & GAS INDEX – BOUNCES ON GRM RECOVERY HOPES

The table captures the Nifty Oil & Gas index for the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	11,341.70	11,404.00	11,304.95	11,322.60
05-Dec-24	11,290.50	11,362.70	11,181.45	11,319.05
04-Dec-24	11,297.95	11,337.20	11,201.95	11,235.40
03-Dec-24	11,219.45	11,289.40	11,177.10	11,267.90
02-Dec-24	11,082.40	11,154.10	10,982.20	11,138.20
29-Nov-24	11,007.70	11,139.55	10,985.80	11,103.75
		Weekly Returns		+1.97%

Data Source: NSE

In the last few weeks, it was Reliance that was putting pressure on the oil & gas index. This week, it was Reliance that helped pull the index up. This week, the oil & gas index closed with gains of 197 basis points or +219 points on the index. Apart from value buying in Reliance after the sharp correction, the stable prices of crude have also raised the prospects of an improvement in the gross refining margins for oil refiners. For the week to December 06, 2024, the Oil & Gas index touched a high of 11,404 and a low of 10,982.

NIFTY AUTO INDEX – AUTOS CONTINUE THEIR UPWARD TRAJECTORY

The table captures the movement of Nifty Auto index in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	23,799.75	23,982.50	23,722.85	23,960.25
05-Dec-24	23,691.10	23,853.75	23,438.55	23,736.25
04-Dec-24	23,746.20	23,850.75	23,466.75	23,584.00
03-Dec-24	23,692.75	23,775.45	23,580.75	23,752.40
02-Dec-24	23,433.00	23,615.45	23,353.75	23,599.60
29-Nov-24	23,169.20	23,446.50	23,128.90	23,368.55
		Weekly Returns		+2.53%

Data Source: NSE

Despite concerns over offtake, and tepid festive demand; the auto sector had a good week on consumption revival hopes. This week the auto index closed 2.53% higher or 592 points up for the week. Auto Index made a weekly high of 23,983 and a low of 23,354; with the investors preferring to bet on a sharp revival in rural consumption.

NIFTY FMCG INDEX – OFFTAKE AND MARGIN CONCERNS REMAIN

The table captures the movement of Nifty FMCG index in the week to December 06, 2024.

Date	Open	High	Low	Close
06-Dec-24	57,742.90	57,997.55	57,602.10	57,744.30
05-Dec-24	57,358.60	57,922.90	56,861.25	57,605.20
04-Dec-24	57,813.70	58,005.90	57,170.35	57,270.35
03-Dec-24	57,278.25	57,767.65	57,056.80	57,689.20
02-Dec-24	57,839.30	58,090.80	57,543.55	57,917.00
29-Nov-24	57,475.95	58,120.45	57,475.95	57,943.70
		Weekly Returns		-0.34%

Data Source: NSE

The weak GCPL guidance late last week has had a sharply negative impact on FMCG stocks this week. For the previous week, the FMCG index was down -0.34% or -200 points on the FMCG index. The Q3 is likely to be a tough quarter for most FMCG players. During the week, the FMCG Index touched a high of 58,091 and a low of 56,861. Interestingly, FMCG was the only one among 20 major sectors to give negative returns in the week.