Sensex, Nifty clock gains of 1% in volatile week; catch key takeaways here

bDespite steep volatillty in FII inflows with a remarkable sell-off following 3-day of FII inflow this week, Indian equities ended the week to November 29 on a positive note. For the week, Nifty ended 0.94 per cent higher, while the BSE 30-share bluechip index ended with gains of 0.87 per cent higher.

The gains in the indices came despite lingering valuations concerns and weak GDP forecast for Q2 which the Street already discounted for.

Today's rally was largely attributed to l

arge-cap-driven, broad-based rally in the domestic market. Discretionary sectors performed well, benefiting from the festive season. The pharma and healthcare sectors saw renewed growth, supported by strong earnings and a moderation in valuations after recent corrections, added Vinod Nair, Head of Research, Geojit Financial Services. 

"The market saw some relief after the recent consolidation, aided by an ease in geopolitical tensions, expectations of stability in government spending in H2FY25, and MSCI rebalancing. The rally was broad-based, while capex-linked sectors like infra, capital goods, and industrials outperformed in expectation of a surge in new order inflows. Brent crude declined by 4% during the week in anticipation of reduced tensions in the Middle East. An ease in oil prices will continue to aid operating metrics of Indian companies in the coming quarters," added Nair.

Top Nifty gainers and losers

From the Nifty pack, top gainers were stocks like Adani Enterprises that gained over 10 per cent following the indictment news earlier this week, followed by other stocks such as Bharat Electronics, Shriram Finance, ONGC and Adani Ports among other top gainers which gained between 4-9.6 per cent.

Top losers however from the Nifty pack were stocks like Bajaj Auto (down 5 per cent), HDFC Life Insurance (down 4 per cent), Eicher Motors (down 3 per cent), SBI Life (down over 3 per cent and HCL Tech (down over 2 per cent)

Top sector gainers and losers

Of the key indices, Nifty Media loggest the most gains of over 5 per cent, followed by the Nifty PSU Bank and Nifty PSE which spurted up to 4.7 per cent.

While on the flip side, sectoral laggards were Nifty Auto and Nifty IT which fell up to 0.8 per cent

Outlook for the week ahead

Expressing optimism, Nair said, "We expect the prospects of H2 earnings to remain positive due to a good monsoon, festival and marriage season, which could ease the impact of earnings downgrades that happened in Q2. Investors’ attention also turned to US and Eurozone inflation indicators, which will influence central banks’ December policy rates.

Stability in the market will depend on the steadiness of the incoming economic data next week. While the market is likely to witness some repercussions from the fall in Q2 FY25 GDP to 5.4 per cent, he added.

On the other hand, investors will be more inclined to act on the upcoming RBI monetary policy. Though the consensus shows status quo, the probability of a rate cut in February is high due to the subdued growth in Q2. Other economic indicators like service and manufacturing PMI data, auto sales, and US job data will also influence investors’ attention and accordingly shape the market momentum, added the expert.

Overall experts anticipate likely consolidation continuing such that the earnings catch up with the valuations.