Weekly Musings – Index performance for week ended November 01, 2024

5 Nov 2024 , 09:29 AM

FRONTLINE INDICES HOLD; SMALLER INDICES SHINE

The week was marked by the first signs that alpha hunting was back in action. While the frontline indices like Nifty and Sensex closed in the positive, it was the mid-cap index and the small index that truly outperformed in the week. In sectors like IT, defence, PSU banks, and even industrials; there was a rush to buy mid and small sized stocks where there appeared to be  more value left on the table.  If we looked at the indices sectorally, we saw sharp gains in the Bank Nifty and modest gains in oil & gas and FMCG indices. However, the IT index fell nearly 4% in the week on fears that the dollar could weaken sharply amidst the US presidential elections this week. The Nifty VIX is still high at 16 levels, so the level of 24,000 may be really tough to defend. Upsides look, most likely, very limited.

BSE SENSEX 30 INDEX – IT SECTOR HOLDS BACK SENSEX GAINS

The table captures the movement of the BSE SENSEX 30 for the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	80,023.75	80,023.75	79,655.55	79,724.12
31-Oct-24	80,044.95	80,044.95	79,287.93	79,389.06
30-Oct-24	80,237.85	80,435.61	79,821.99	79,942.18
29-Oct-24	80,037.20	80,450.48	79,421.35	80,369.03
28-Oct-24	79,653.67	80,539.81	79,418.82	80,005.04
25-Oct-24	80,187.34	80,253.19	79,137.98	79,402.29
		Weekly Returns		+0.41%

Data Source: BSE

It was a week of marginal gains for the BSE Sensex at 41 basis points or 322  points for the week. While banks, oil and FMCG offered support to the Sensex, IT put pressure on the index. During the week, the Sensex touched a high of 81,540 and a low of 79,288; closing below the psychological 80,000 levels second week in a row; becoming the resistance.

NIFTY 50 INDEX – ELEVATED VIX AND FPI SELLING HOLD BACK NIFTY

The table captures the movement of Nifty 50 index in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	24,302.75	24,368.25	24,280.20	24,304.35
31-Oct-24	24,349.85	24,372.45	24,172.60	24,205.35
30-Oct-24	24,371.45	24,498.20	24,307.30	24,340.85
29-Oct-24	24,328.85	24,484.50	24,140.85	24,466.85
28-Oct-24	24,251.10	24,492.60	24,134.90	24,339.15
25-Oct-24	24,418.05	24,440.25	24,073.90	24,180.80
		Weekly Returns		+0.51%

Data Source: NSE

It was a week of marginal gains for the Nifty 50 at 51 basis points or 124 points for the week. While most sectors (barring IT) were supportive of the large cap Nifty, VIX at 16 levels put pressure. Also, FPIs sold $13.5 Billion in secondary market equities in October. During the week, the Nifty touched a high of 24,498 and a low of 24,135; closing well below the psychological 25,000 levels. Nifty needs to break above 25,000 to resume uptrend.

NIFTY MID-CAP 100 INDEX – ALPHA HUNTING BACK IN FOCUS

The table captures the movement of Nifty Mid-Cap 100 in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	56,471.15	56,657.05	56,415.70	56,496.05
31-Oct-24	56,349.10	56,400.55	55,746.20	56,112.85
30-Oct-24	56,166.20	56,800.90	55,973.65	56,339.25
29-Oct-24	55,979.00	56,312.60	55,239.85	56,251.30
28-Oct-24	55,349.75	55,937.90	55,095.70	55,736.60
25-Oct-24	56,482.90	56,506.35	54,740.95	55,277.95
		Weekly Returns		+2.20%

Data Source: NSE

It was a week of smart gains for the Nifty Mid-Cap 100 at 220 basis points or 1,218 points for the week. Even in sectors like IT, the index did better than the front line indices. However, there was pressure from volatile rupee and rising oil prices. During the week, the Nifty Mid-Cap 100 touched a high of 56,801 and a low of 55,096.

NIFTY SMALL-CAP 100 INDEX – TURNS IN A STELLAR PERFORMANCE

The table captures movement of Nifty Small Cap 100 in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	18,764.95	18,862.25	18,738.85	18,794.90
31-Oct-24	18,390.45	18,630.00	18,316.95	18,602.60
30-Oct-24	18,231.30	18,454.70	18,183.20	18,390.90
29-Oct-24	18,099.20	18,227.30	17,870.65	18,198.95
28-Oct-24	17,912.30	18,139.10	17,734.15	18,062.30
25-Oct-24	18,292.35	18,352.85	17,670.90	17,847.90
		Weekly Returns		+5.31%

Data Source: NSE

The small cap index gained 947 points or +5.31% for the week; almost making up for the previous week’s losses. There was buying from retail and from domestic funds. This week, the Nifty Small Cap index touched a high of 18,862 levels and a low of 17,734. Like the mid-caps, the small cap index is also vulnerable to rupee volatility and oil price spike. However, the good news is that alpha hunting was seen in smaller stocks.

BANK NIFTY INDEX – RALLIES AHEAD OF FED NOVEMBER POLICY

The table below captures the movement of BANKNIFTY in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	51,550.15	51,825.50	51,459.40	51,673.90
31-Oct-24	51,649.45	52,005.60	51,318.10	51,475.35
30-Oct-24	51,988.70	52,220.00	51,733.00	51,807.50
29-Oct-24	51,404.10	52,354.85	51,278.90	52,320.70
28-Oct-24	51,061.35	51,589.15	51,012.55	51,259.30
25-Oct-24	51,369.75	51,501.05	50,382.10	50,787.45
		Weekly Returns		+1.75%

Data Source: NSE

Bank Nifty was the star sectoral performer of the week gaining 887basis points or +1.75% for the week. Banks rallied ahead of the Fed policy statement this week, where another 25 bps rate cut is expected. That may put pressure on RBI to follow suit. During the week, the Bank Nifty touched a high of 52,355 and a low of 51,013. Due to its weight in the overall Nifty, the Bank Nifty held the generic markets up.

NIFTY IT INDEX – DOLLAR WEAKNESS AND US ELECTION CONCERNS

The table captures the movement of Nifty IT index in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	40,568.65	40,646.70	40,366.50	40,433.65
31-Oct-24	41,501.95	41,501.95	40,191.95	40,407.55
30-Oct-24	41,975.35	42,164.35	41,572.10	41,668.60
29-Oct-24	42,167.55	42,210.90	41,746.60	42,031.45
28-Oct-24	42,012.60	42,401.30	41,963.30	42,205.40
25-Oct-24	42,235.30	42,366.15	41,874.55	42,038.85
		Weekly Returns		-3.82%

Data Source: NSE

Nifty IT was the worst frontline performer of the week losing -1,605 basis points or -3.82% in trades. While IT sector has gained in recent weeks from dollar strength, the concerns over the US election outcome and its impact on dollar strength, spooked IT stocks. During the week, Nifty IT index touched a high of 42,401 and a low of 40,192. IT was the only heavyweight sector to put pressure on the Nifty overall.

NIFTY OIL & GAS INDEX – DELIVERS A MODEST PERFORMANCE

The table captures the Nifty Oil & Gas index for the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	11,399.90	11,460.25	11,394.85	11,442.25
31-Oct-24	11,361.50	11,409.50	11,288.20	11,347.10
30-Oct-24	11,382.25	11,480.90	11,300.45	11,366.90
29-Oct-24	11,330.00	11,428.45	11,206.00	11,409.55
28-Oct-24	11,367.50	11,483.00	11,244.15	11,371.80
25-Oct-24	11,670.80	11,683.00	11,306.70	11,352.20
		Weekly Returns		+0.79%

Data Source: NSE

After several weeks of losses, the oil & gas index closed this week with gains of 79 basis points or 90 points on the index. While the oil price volatility and stress on GRMs continue, it is largely in the price already. For the week to November 01, 2024, the Oil & Gas index touched a high of 11,483 and a low of 11,206; making lower highs and lower lows.

NIFTY AUTO INDEX – CONTRASTING PULLS LEAD TO FLAT AUTO INDEX

The table captures the movement of Nifty Auto index in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	23,792.70	23,869.75	23,765.90	23,805.60
31-Oct-24	23,606.65	23,625.30	23,401.85	23,514.70
30-Oct-24	23,430.60	23,855.15	23,423.90	23,594.00
29-Oct-24	23,941.65	24,048.65	23,264.30	23,588.60
28-Oct-24	23,807.05	24,224.05	23,664.50	23,964.45
25-Oct-24	24,360.95	24,378.15	23,519.80	23,799.30
		Weekly Returns		+0.03%

Data Source: NSE

With genuine concerns over offtake, festive demand and cost of ownership and maintenance of cars; the auto sector has been under pressure. This week the auto index closed absolutely flat (3 bps higher). Auto Index made a weekly high of 24,224 and a low of 23,264; a clear case of the negatives still outweighing the positives.

NIFTY FMCG INDEX – DEMAND FACTOR REMAINS A CONCERN

The table captures the movement of Nifty FMCG index in the week to November 01, 2024.

Date	Open	High	Low	Close
01-Nov-24	59,542.25	59,620.40	59,328.70	59,433.20
31-Oct-24	59,773.60	59,882.35	58,983.75	59,203.00
30-Oct-24	59,269.95	59,837.05	59,195.60	59,748.90
29-Oct-24	59,354.50	59,389.90	58,694.95	59,203.85
28-Oct-24	58,984.10	59,518.95	58,571.30	59,252.65
25-Oct-24	58,724.90	59,465.55	58,681.20	58,908.50
		Weekly Returns		+0.89%

Data Source: NSE

Despite demand concerns, the FMCG index managed to close with gains of 89 basis points or 525 points on the index. It was more of a minor bounce in FMCG stocks after several weeks of heavy selling. During the week, the FMCG Index touched a high of 59,882 and a low of 58,271. Most Q2 results of FMCG stocks stayed under pressure during the week.