Weekly Market Wrap: D-street ended with moderate gains amid global market fluctuations. What lies ahead? 

Stock markets: Indian equity benchmarks ended the passing week with a gain of around a percentage point on the back of tensions in the Middle East eased, coupled with strong quarterly earnings from companies.

Besides, India's net direct tax collections surged by 17.7 per cent year-on-year to Rs 19.58 lakh crore in the fiscal year ended March 2024 and exceeded the revised estimates by Rs 13,000 crore. However, traders booked some of their weekly gains of final day of the trade as the World Bank in a report expects that interest rates could remain higher than expected in 2024 and 2025 amid volatility in commodity prices globally.

These signals led the BSE Sensex to surge 642 points, or 0.88%, at 73730.16 during the week ended on April 26, 2024. While the Nifty gained 273 points, or 1.23%, to 22419.95. Sector-wise, the BSE Realty index surged the most (4.4%) during the week gone by. While BSE Metal index registered a gain of 3.8% followed by BSE Capital Goods, which jumped 3.4%.  

Friday performance: Prashanth Tapse, Senior VP (Research), Mehta Equities says, the fall was on expected lines as both benchmark indices had rallied for five straight sessions and profit-taking has been due for some time. Correction is also attributed to global factors after Japanese Yen fell to new 34-year low and disappointing US data pushed its benchmark yields to over 4.7%, thus worsening hopes of an interest rate cut in the medium term. “Fresh uptick in international crude oil prices on the back of ongoing west asia conflict may also play a spoilsport and weigh on domestic inflation,” Tapse said.

As many as 34 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 9.8%, Axis Bank emerged as the top gainer in the index. It was followed by Divi's Laboratories (9.7%), Tech Mahindra (7%), State Bank of India (6.7%), and Hero MotoCorp (6.6%). Eicher Motors, Hindalco Industries, and Dr. Reddy's Labs also advanced by over five percent.  On the other hand, Kotak Mahindra Bank, Bajaj Finance, and Tata Consumer Products declined 10.3%, 5.5%, and 3%, respectively. 

Market Macros

Mahavir Lunawat, Managing Director, Pantomath Capital Advisors says, The Indian stock market ended correction last week & found support at lower levels. “We have seen pullback rally during this week. In short term, Indian Market will remain volatile ahead of Geopolitical tensions & due to Q4 FY2024 earning season” he said.

Commenting on global markets Lunawat added, after experiencing a correction last week, the US market found support at lower levels and started a pullback rally this week with easing geopolitical tensions. The strong economic data & various comments from Fed officials during last couple of days indicating the US economy has to deal with higher interest rates for prolonged period of time dented hope of early rate cuts.

“Market participants have reduced their expectations for rate cuts by the Fed within this year, there is still speculation that the Fed might begin to ease rates starting in September this year, marking the beginning of a potential easing cycle. The Federal officials watch out economic data in coming months for final conclusion on their monetary decision. The US Q1CY24 GDP data, PCE data will remain focus in coming days to get an idea overall US economy”, Lunawat said.

Nifty outlook

According to Rupak De, Senior Technical Analyst at LKP Securities, The Nifty remained under the selling pressure throughout the session as the index failed to sustain above the crucial level of 22500. “On the daily chart, a dark cloud cover pattern is observed, indicating a potential bearish reversal. Immediate support is situated at 22300, below which the Nifty could extend its losses towards 22000. On the other hand, the level of 22500 might act as a technical resistance for the Nifty”, De said.