Week ahead market report from Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd
2023-12-10 23:10:53 (Time Zone: IST)
Benchmark indices gained for sixth straight week having best stretch of weekly gains in 3 years after RBI Monetary policy and raised GDP forecast. Nifty rose above 21000 for the first time ever. Sensex also touched life time high. Nifty Bank hits record high, top contributors HDFC Bank, ICICI Bank & Axis Bank up more than 1%.
RBI kept the repo rate unchanged at 6.50% in its Monetary policy citing strong GDP growth and easing inflation. RBI also raised the GDP growth expectation by 50bps to 7% for FY24 and kept inflation forecast unchanged at 5.4%. It is expected that the RBI's decision would help in the growth of the economy. Increasing GDP forecast will have a positive effect on the market. We expect that the rate pause will continue for some time.
Initial public offerings (IPO) raised around Rs 41,000cr so far this year. India has emerged as a global leader in the number of IPOs year to date in 2023. Q3FY23 saw 21 IPOs as compared to just 4 in Q3FY22. A significant increase of 376% in the proceeds raised in Q3FY23 to US$1770mn compared to US$372mn in Q3FY22. Some bumper listings were recorded in the primary market in mainboard as well as SME segment in the month of November which kept investors busy with subscriptions and listings. After an active Nov, Dec month is also going to witness some new IPOs. It is expected that 15 new issues are lined up for the upcoming 2 months. However, investors should remain cautious and invest in an IPO after considering its valuations and net proceeds usage.
It is expected that the reversal in trend in global market and FIIs started buying again with stronger participation of retail investors will keep the market spirits high. Benchmark indices hit record highs. Investors are optimistic about India's strong economic growth and gives India an edge over China. Lower prices of crude oil is also benefiting India to control inflation. At the same time, the recent election victory of BJP in three out of four states boosted investors' confidence about political and policy stability, expecting more infrastructure investment from government. We expect the sentiment of market will strengthen further. The markets will also keep track at US FOMC meet outcome scheduled next week.
Sensex, Nifty opened on flat note and later hit fresh record highs in Friday's trade on gains in IT stocks and the frontline indices hit new lifetime highs, with the NSE Nifty 50 topping the key 21,000 level and close the week at 20900 (+3.30%), while, Sensex closed the week with 3.30% gains at 69700.
In a bullish market scenario, the index appears poised to continue its upward trajectory, targeting 21,500 in the near term. Despite occasional consolidation, the momentum remains strong. Key obstacles are identified at the 21,000-21,100 level, with a crucial support base at 20,600.
Turning to Bank Nifty, a strategy of capitalizing on downward movements as buying opportunities is recommended, provided that the support level of 46,500 remains unbreached. The immediate resistance levels to watch for an upward move are 47,500-47,800.