Nifty and Sensex regained strength amid Dovish US Fed remarks, strong domestic macros

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Indian equity benchmarks recovered positive momentum after a week’s halt as global risk assets surged after Federal Reserve meeting minutes showed support for a smaller rate hike from now on. Also, Organization for Economic Co-operation and Development (OECD) in its latest report has said that India is set to become the second fastest growing economy in G20 in FY2022 with a growth rate of 6.6 per cent in this fiscal- 23 behind Saudi Arabia despite a slump in global demand and a tightening of monetary policy to manage inflationary pressures.

While Revenue Secretary Tarun Bajaj has said that India’s tax collection in the current financial year will exceed about Rs 4 lakh crore due to estimated income tax, customs duty and GST mop-up. On these positive cues, the BSE Sensex closed at 62,293.64, up 630.16 points or 1.0 per cent, while the Nifty closed at 18,512.75, up 205.10 points or 1.1 per cent, during the week ended November 25.

Market veteran Shrikant Chauhan, Head of Equity Research (Retail) at Kotak Securities said: “Continued softening of global bond yields on ‘peak’ inflation expectations and fall in crude oil prices helped equity markets to continue their momentum Key and helped the Nifty- 50 index hit its new all-time high on a closing basis. FPIs were net sellers in the last five trading sessions, while DIIs were net buyers in the same period. Going forward, D-Street Macro Trends The markets going forward could be dominated by the global news flow and the steps taken by various governments to deal with their economy.

“US Federal Reserve officials expect to raise short interest rates “soon,” according to the minutes of the November meeting released on Wednesday. Some officials expressed concern over the impact of the rate hike on financial stability and the economy. In Asia, mainland China reported more than 31,000 Covid infections on Wednesday, including asymptomatic cases. This is more than the country reported during the Shanghai lockdown in April. In Japan, Tokyo saw the highest core consumer price index since 1982.

Last week, 41 stocks of the Nifty 50 index gave positive returns to the investors. With a gain of (10.3 per cent), HDFC Life Insurance Company emerged as the top gainer in the index. It was followed by Apollo Hospitals Enterprise (up 8.7 per cent), Bharat Petroleum Corporation (up 6.7 per cent), IndusInd Bank (up 5.3 per cent) and Axis Bank (up 3.3 per cent).

Mahindra & Mahindra, NTPC, JSW Steel and Sun Pharmaceutical Industries also advanced over 2.5 per cent. On the other hand, Nestle India, Kotak Mahindra Bank and Bajaj Finserv declined 2.1 per cent, 1.6 per cent and 1.3 per cent, respectively.

Sector-wise, both the BSE Information Technology index and BSE Tech index gained 1.9 per cent during the past week. BSE Oil & Gas has also given a return of 1.8 per cent. While, BSE Auto, BSE Capital Goods, BSE Metal, BSE Carbonex, BSE Healthcare and BSE Bankex indices also rose more than 1 per cent. While the BSE Power and BSE Realty indices declined by 2.1 per cent and 0.9 per cent, respectively, during the week.

Deepak Jasani, Head Market Strategist, Retail Research, HDFC Securities, said: “Nifty gained 1.12% during the week in 5 out of last 6 weeks. Global markets traded largely unchanged on Friday, even as they rose for the week. Nifty may continue its uptrend and may challenge the all-time high of 18604 soon while 18325-18403 band may provide support in the near term.

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