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Sensex, Nifty gain 1% amid weak cues; 46 smallcaps up 10-21% during the week

Coming week is expected to be volatile, as inflation fears worsen. Investors should be careful in picking stocks and should invest in a staggered manner, say analysts

November 13, 2021 / 11:37 AM IST

The market extended gains for the second week ended November 12 despite continued selling by foreign institutional investors (FIIs) and weak global cues on inflation fears.

During the week, the Sensex rose 619.07 points, or 1.03 percent, to close at 60,686.69, while the Nifty50 added 186 points, or 1.03 percent, to close at 18,102.8.

On the sectoral front, oil & gas, capital goods, power and IT supported the Sensex and the Nifty to close above 60,000 and 18,000, respectively.

The broader indices performed in-line with main indices, with BSE midcap and smallcap indices adding a percent.

During the week, 46 smallcaps gained 10-21 percent. These included Cerebra Integrated Technologies, Monte Carlo Fashions, Aurum Proptech, SREI Infrastructure Finance, Subex, KPIT Technologies, Sushil Decor, NIIT, Brightcom Group and Rattanindia Enterprises.

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Twenty-one stocks, however, slipped between 10-29 percent. Vikas WSP, NGL Fine Chem, Hexa Tradex, GTL Infrastructure, Godawari Power & Ispat, Chaman Lal Setia Exports, ALLSEC Technologies and Balaji Amines are some of them.

During the week, the global markets remained highly volatile as inflation fears elevated. The week started with disappointing numbers from China—consumer price index rose 1.5 percent YoY in October, while the producer price index rose by 13.5 percent YoY, owing to imported inflation and domestic supply shortages, said Vinod Nair, Head of Research at Geojit Financial Services.

The US inflation hit a 30-year high in October at 6.2 percent YoY, adding fears for an earlier than expected rate hike, he said.

"The domestic market also followed this trend, however, the momentum regained at the end of the week due to sectors in the market which are least impacted by inflation like IT & others, and volume growth, reforms, supportive monetary policy, good quarterly earnings and strong domestic macro data points," he added.

During the week, the BSE 500 index rose 1.3 percent, with 19 stocks, including KPIT Technologies, Minda Industries, Adani Total Gas, Sheela Foam, Adani Enterprises, SH Kelkar & Company, Gujarat Fluorochemicals and Welspun Corp, adding 10-23 percent.

“Indian equities gave positive returns during the week. The BSE Sensex and Nifty moved up by 1 percent, whereas BSE midcap and BSE smallcap index saw returns between 1.1-1.5 percent,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

He said the September quarter earnings season continued to keep pace with estimates, while FIIs were net sellers, so far, in November.

With the results season coming to an end, investor focus would shift towards macro developments. Inflation, oil prices, FII flows, and central bank policies would be among the factors directing the markets, Chouhan said.

Where is Nifty50 headed?

Rahul Sharma, Co-Founder, Equity99

The coming week would be a shorter one, with the market remaining close on November 19 on account of Guru Nanak Jayanti. Results season is over, with only a few small & midcaps companies left which would declare their results on November 15.

We may see some volatility in markets with three IPOs—SJS Enterprises, Policy Bazar and Sigachi Industries—set to list on November 15.

Global events will also have a bearing on the market, while India will announce October month import export numbers on the first day of the well.

Banking stocks will be in focus with the US declaring T Bonds foreign buying on November 17.

Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One

For the coming week, 18,200-18,350 is to be seen as a crucial range and till the time, the Nifty doesn’t surpass it convincingly, the market won’t be out of the woods.

It is too early to comment but we can clearly see a bearish formation of ‘Head and Shoulder’ on the daily chart.

The neckline support is around 17,700-1,7600, which, if broken, can cause some difficulty in the short run.

With reference to our recent cautious stance on the market, we will not be surprised to see it happen soon, if the index fails to go beyond 18,200-18,350 in the coming week.

Yesha Shah, Head of Equity Research, Samco Securities

Given that most quarterly results and festival mood are behind us, indices are expected to move sideways.

As markets across the world are trying to decode the implications of rising inflation, any intensive selling by FIIs may take Indian indices lower, unless domestic players provide support.

Next week, Dalal Street will also see a slew of new IPOs listing and the sentiment surrounding listing gains continues to remain bullish.

Amid worsening inflation fears, investors are advised to use knee-jerk reactions to, at best, cherry-pick quality stocks in resilient sectors and invest in a staggered manner.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

 
Rakesh Patil
first published: Nov 13, 2021 11:36 am

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