Tracking positive global cues, strong inflows from foreign institutional investors, robust macro-economic data back home as well as stable Q2 numbers from India Inc. helped Nifty50 climb above 12200 levels with ease.
The S&P BSE Sensex rallied 5.75 percent while the Nifty50 rose 5.3 percent for the week ended November 6, compared to 3.3 percent rise in the S&P BSE Mid-cap index, and about 2.2 percent gain seen in the S&P BSE Smallcap index in the same period, data showed.
Small & Midcaps underperformed benchmark indices for the week ended November 6 but there are as many as 33 stocks in the S&P BSE 500 index which rose 10-40 percent in just 5 trading sessions.
Stocks that rose in double digits include names like Axis Bank, Hindalco Industries, Aarti Industries, CSB Bank, State Bank of India, Bandhan Bank, IndusInd Bank, CARE Ratings, and Bajaj Finance.
Amid the logjam in the US elections, markets across the globe rallied on liquidity in anticipation of a stimulus package from the US government. Foreign institutional investors poured more than Rs 13000 cr in the cash segment of the Indian equity markets so far in November.
“Markets made several gap-up openings in the week gone by imitating the US indices and political theatrics. It is the sheer liquidity and the hopes of a stimulus which is driving the bulls in high spirits,” Nirali Shah, Senior Research Analyst, Samco Securities told Moneycontrol.
“Therefore, irrespective of the outcome of this year’s US elections, markets are expected to continue their celebratory mood in equities and commodities across the globe,” she said.
She further added that on the macro front right from diesel consumption to PMI, from labor-intensive construction activities to GST collections all these major ground-level macro indicators are displaying strong recovery to pre-Covid levels.
Equity benchmarks entirely recouped last week’s losses and recorded the highest weekly close in nine months at 11264, up 5.3 percent. Sectorally, all major indices ended in green led by financials, metal, and pharma.
The weekly price action formed a sizable bull candle carrying higher high-low and resolved out of the past three weeks high 12025, as on expected line, volatility during the US election phase offered an incremental buying opportunity.
The Nifty50 s poised to hit fresh record highs by December while small & midcaps could play catch up rally in the coming week, suggest experts.“We reiterate our constructive stance of Nifty retesting life highs of 12400 by December (which was discussed in the edition of 26th October), as market panned out on expected lines. In the upcoming week, we expect a broader market to witness catch-up activity as Nifty midcap index resolved out of two months consolidation,” Dharmesh Shah, Head – Technical, ICICI Securities told Moneycontrol.
“The robust price structure makes us believe, any temporary breather from here on should be capitalised as an incremental buying opportunity. We expect a broader market to endure its catch up activity,” he said.
Shah further added that the ongoing structural improvement makes us confident to revise the support base at 11800 as it is 61.8% retracement of ongoing up move (11535-12280), at 11820.
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