The Indian stock market rebounded last week after two consecutive weeks of losses, offering a much-needed respite to investors. Despite geopolitical tensions and concerns over allegations against the Adani Group, domestic equity benchmarks Nifty 50 and Sensex ended the week on a positive note, driven by bargain buying and easing credit risk worries.
The Nifty 50 surged by 2.39% to close at 23,907.25, while the BSE Sensex jumped 2.54% to end at 79,117.11. This recovery resulted in weekly gains of 1.6% and 2%, respectively. Broad-based buying across most sectors, except energy, supported the rally, with realty, auto, FMCG, IT, and banking stocks leading the recovery.
Market Triggers for the Week:
1. Assembly Election Results
Investors are closely watching state election outcomes, which could influence market sentiment and policy outlook.
2. Q2 GDP Data
India’s GDP figures for the July-September quarter of FY2024-25 will be released on Friday, November 29. Analysts expect economic growth to moderate to around 6.5% during this period, as per ICRA projections.
3. Foreign Fund Flow and Global Cues
The persistent outflow of foreign institutional investments (FII) continues to impact markets. Traders will also monitor global developments, including U.S. bond yields, the dollar index, and crude oil prices, alongside geopolitical tensions like the ongoing Russia-Ukraine conflict.
4. F&O Expiry
The November series expiry is likely to add to market volatility, with short-covering rallies playing a crucial role in determining near-term movements.
5. IPO Activity
The primary market will see action with new IPOs and listings in the mainboard and SME segments.
Expert Insights
Vinod Nair, Geojit Financial Services:
“The market recovered last week’s losses on Friday, as investors seized opportunities to buy undervalued stocks. However, clarity is needed to confirm whether this rebound will evolve into a sustained rally.”
Santosh Meena, Swastika Investmart Ltd:
“Markets have been oversold for two series, triggering a short-covering rally ahead of the F&O expiry. While the Adani-triggered sell-off marked a panic bottom, a clearer trend is yet to emerge.”
Opportunities and Risks
Despite lingering concerns, several blue-chip stocks are trading at attractive valuations. Meaningful corrections in mid- and small-cap indices also offer opportunities for broader market momentum. However, investors should exercise caution, as the market’s direction depends on clarity from domestic developments, macroeconomic data, and global cues.
Key Data Points to Watch:
- India’s GDP Growth: Analysts project moderation to 6.5% for Q2 FY25.
- Fiscal Deficit and Infrastructure Output: Updates expected this week.
- Purchasing Managers’ Index (PMI): Market participants will closely monitor these figures.
In summary, while the market’s recovery last week offers optimism, the coming days remain crucial. Investors are advised to adopt a cautious approach, monitor developments closely, and focus on value opportunities in sectors with strong fundamentals.
