Mumbai: Domestic stock markets are expected react, when it opens on Monday,to the recent election outcomes in Jharkhand and Maharashtra as well as domestic macroeconomic data and foreign Institutional fund flows, according to the market analysts.
The market analysts say that the bi-monthly Monetary Policy Committee (MPC) which will take place in the first week of December will also have an impact of the activities of the investors, as analysts anticipate a 25-bps rate cut amid concerns of slowing economic growth and moderating inflation.
The last trading session in the market ended with decent gains, offering relief after weeks of correction.Despite a negative bias for most of the week due to persistent FII selling, Friday’s sharp recovery, led by bargain hunting in index heavyweights, helped indices close near their highs.
The Nifty and Sensex gained nearly 2 per cent, ending at 23,907.20 and 79,117.10, respectively.”Markets will first react to the outcomes of the Maharashtra and Jharkhand elections. Additionally, macroeconomic indicators, including GDP and infrastructure output, will garner significant attention.
Participants remain focused on FII fund flows, given their ongoing selling spree,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.”Looking ahead, the RBI’s meeting from December 4th-6th is generating significant interest, with analysts anticipating a 25-bps rate cut amid concerns of slowing economic growth and moderating inflation,” said Manish Goel, Founder and MD, Equentis observing the markets.
Goel further added that the upcoming week is likely to bring heightened volatility and cautious trading as investors navigate political uncertainties, economic data releases, and corporate developments.Observing the mood of the market, Joseph Thomas, Head of Research, Emkay Wealth Management stated that despite the up seen in the market during the trading sessions, it remains to be seen to what extent the current momentum is going to be sustained next week.”The Russia-Ukraine conflict, the Middle East situation which is still awaiting resolution, local election results in crucial states etc. are all factors that may have some impact on the markets in the coming wee,” he added.
Market experts are hopeful despite the high volatility in the markets, as Krishna Appala, Sr. Research Analyst, Capitalmind Research said, ” Despite global challenges, India’s long-term growth story remains compelling.”Most sectors, except energy, contributed to the rebound, with realty, auto, and FMCG leading the pack.
IT and banking played a pivotal role in capping losses and driving the recovery in the benchmark. Broader indices also edged higher, with gains ranging between 0.9 per cent and 1.8 per cent. On the other hand, the foreign investors extended their selling spree in Indian equity markets for the third consecutive week in November, according to data released by the National Stock Exchange.
This week alone, foreign investors sold equities worth Rs 11,412 crore, adding to the ongoing selling pressure.With this, the net selling by foreign investors in November has reached Rs 41,872 crores, indicating persistent bearish sentiment from overseas players. The consistent outflow has weighed on market sentiments, creating volatility in the indices.
Meanwhile, domestic institutional investors (DIIs) have continued to provide much-needed support to the Indian markets.This week, DIIs purchased equities worth Rs 11,035 crore, cushioning the impact of foreign outflows. Their total net buying in November now stands at Rs 37,559 crore.
