Weekly Market Wrap to November 29: Sensex and Nifty Gain Nearly 1% in Volatile Week

In a week marked by significant volatility, the Indian stock market concluded positively by November 29. Following fluctuations in Foreign Institutional Investor (FII) inflows, which included a notable sell-off after a three-day influx, Indian equities managed to close the week on an uptrend. The Nifty index increased by 0.94 percent, while the BSE 30-share benchmark index rose by 0.87 percent.

Despite ongoing concerns regarding valuations and a subdued GDP forecast for the second quarter, the market saw gains. Analysts noted that the increase in indices can be largely attributed to a broad-based rally led by large-cap stocks, particularly boosted by the performance of discretionary sectors, which experienced a surge due to the festive season.

Additionally, sectors such as pharmaceuticals and healthcare witnessed renewed growth. This was supported by strong earnings reports and a correction in previously elevated valuations, according to Vinod Nair, Head of Research at Geojit Financial Services. He highlighted factors contributing to this week’s rally, including the easing of geopolitical tensions, expectations of stable government expenditure in the second half of FY25, and MSCI rebalancing.

Investors also took comfort from a decline in Brent crude prices, which fell by 4% during the week amid expectations of decreased tensions in the Middle East. The moderation in oil prices is expected to benefit the operating metrics of Indian companies in the upcoming quarters.

Top Nifty Gainers and Losers

Among the Nifty stocks, notable gainers included Adani Enterprises, which surged over 10% following recent news regarding its indictment. Other stocks that performed well included Bharat Electronics, Shriram Finance, ONGC, and Adani Ports, all of which gained between 4% and 9.6%.

Conversely, top Nifty losers included Bajaj Auto, which fell by 5%, followed by HDFC Life Insurance with a 4% decrease, Eicher Motors down by 3%, SBI Life also dropping over 3%, and HCL Tech down more than 2%.

Sector Performance

In terms of sector performance, Nifty Media emerged as the top gainer, logging an increase of more than 5%. This was followed by the Nifty PSU Bank and Nifty PSE, which surged by up to 4.7%. However, the underperforming sectors included Nifty Auto and Nifty IT, both of which saw declines of up to 0.8%.

Outlook for the Coming Week

Looking ahead, optimism remains among market analysts. Nair stated that upcoming earnings for the second half of the year are expected to be positive, bolstered by favorable monsoon conditions and festivities which may mitigate the effects of earnings downgrades observed in the second quarter.

Investor focus will also shift to inflation indicators from the US and Eurozone, as these will influence central bank policy rates in December. Market stability is anticipated to depend on the consistency of upcoming economic data. While the markets may experience ramifications from the decline in GDP figures to 5.4% in Q2 FY25, investor sentiment might be swayed by the Reserve Bank of India's forthcoming monetary policy report.

Though the general consensus suggests a steady approach, expectations for a potential rate cut in February have risen due to the weak growth showcased in Q2. Other significant economic indicators, such as service and manufacturing PMI, auto sales, and employment data from the US, will also be critical in shaping market movements.

Overall, experts predict continued consolidation within the market, aiming for earnings to align more closely with current valuations.

Market, Stocks, Gains