Markets remained volatile during the week ended December 3 amid weak global cues and rising concerns over the new Omicron variant, global inflation fears and the Fed hinting towards early tapering. However, the market ended with a percentage gain, supported by domestic cues such as improved GDP and manufacturing PMI data, and the second highest GST collection.
In the last week, BSE Sensex added 589.31 points (1 percent) to close at 57,696.46, while the Nifty50 rose 170.25 points (0.99 percent) to end at 17,196.7 levels.
However, in the month of November, the Nifty fell 3.9 percent, while the Sensex was down 3.8 percent.
In the last month, BSE Metal and Bankex indices slipped nearly 9 percent each, while Realty, Auto and Energy indices shed 4-5 percent. On the other hand, BSE Telecom index rose over 6 percent and IT and Power indices jumped 2-3 percent.
Among broader indices – BSE Midcap index fell 2.3 percent, while the Smallcap index ended flat. However, in the last week, Midcap and Smallcap indices added a percent each.
In the month of November, more than 100 smallcap stocks rose from 10 percent to 122 percent including Aurum Proptech, Tata Teleservices (Maharashtra), Brightcom Group, GRM Overseas, KPIT Technologies, JBM Auto, Cerebra Integrated Technologies, Jindal Worldwide, Olectra Greentech and Mirza International.
On the other hand, over 200 smallcap stocks plunged 10-28 percent including Gayatri Projects, Vikas WSP, Ujjivan Financial Services, Godawari Power & Ispat, Graphite India, Valiant Organics, Spandana Sphoorty Financial, Manappuram Finance, GNA Axles, Bajaj Consumer Care, Sequent Scientific and Spencer Retail.
“Positive domestic macroeconomic data supporting economic growth helped boost investor sentiment during the first half of the week,” said Vinod Nair, Head of Research at Geojit Financial Services.
India’s Q2 GDP grew at 8.4% as economic activity normalised post the second COVID-19 wave.
“However, the sentiment reversed towards the end of the week on growing concerns over Omicron as India reported cases. Fed Chair’s remarks stating a possibility of a faster end to the bond-buying programme and interest rate hike also kept investors on edge,” Nair said.
Among midcaps, Apollo Hospitals Enterprises, Rajesh Exports, Vodafone Idea, GlaxoSmithKline Pharmaceuticals, Aditya Birla Capital, CRISIL and Torrent Power rose 10-33 percent, while losers included Jindal Steel & Power, JSW Energy, Ashok Leyland, Bharat Heavy Electricals, Mahindra & Mahindra Financial Services, Steel Authority of India and Power Finance Corporation.
For November, the BSE 500 index shed 3 percent with 88 stocks falling 10-25 percent, dragged by Ujjivan Financial Services, Graphite India, IndusInd Bank, Spandana Sphoorty Financial, Manappuram Finance, Bajaj Consumer Care, Sequent Scientific, GE Power India and CreditAccess Grameen.
“Although we started this week on a negative note and tested 16800, we then saw a relief rally as the market had reached an oversold territory and the primary targets of bearish pattern were met,” said Ruchit Jain, Trading Strategist, 5paisa.com. “The Bank Nifty index took support around its 200-DMA, but did not see much buying interest during the week, and in between, the pullbacks were only short covering moves.”
He said that a sell-off in select heavyweights was seen on Friday when the Nifty approached its 20 DEMA resistance around 17500. “The chart structure indicates that although the Nifty has seen a support base formation around 16800, we are not out of the woods yet and 17500 is now the crucial hurdle that the bulls need to surpass for a broader buying interest,” Jain said.
Where is the Nifty50 headed?
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
The Nifty failed to hold above the 17400-17500 zone, which is a bearish signal. We are resisting at higher levels and therefore the upside is definitely capped in that region. Unless we do not get past the patch of 17400-17500 on a closing basis, we won’t really see a meaningful upside rally.
If the markets were to break 17100 next week, it would be a matter of concern as there is every possibility we may re-enter the current bear trend.
Rohit Singre, Senior Technical Analyst at LKP Securities:
Good demand zone for Nifty is already formed near 17100-17000 zone and sustenance above these levels will see the index march towards 17500-17600 in the near term. However, if it fails to hold those levels, then further profit booking can push the index much lower. We see immediate hurdles near the 17300-17440 zone.
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