Indian stock markets experienced a tough week, with both the Nifty 50 and Sensex falling for the sixth time in seven weeks. The Nifty 50 ended 0.11% lower at 23,532.7, dipping below its 200-day moving average for the first time since April 2023. The Sensex dropped 0.14% to 77,580.31. Both indices saw a weekly loss of around 2.5%.
Experts attributed the decline to slowing consumer demand, weak corporate earnings, and persistent foreign investor outflows. The market holiday on November 15 for Guru Nanak Jayanti provided no respite.
Vinod Nair, Head of Research at Geojit Financial Services, noted that premium stock valuations without matching earnings growth have prompted investors to shift away from riskier assets. H1FY25 results have been disappointing, increasing the likelihood of further earnings downgrades.
Despite these concerns, there’s optimism for H2FY25, driven by expectations of increased government spending, better rural demand, and favorable monsoon conditions.
Market Outlook by Dharmesh Shah, ICICI Securities:
Dharmesh Shah, VP at ICICI Securities, highlights the following key points:
- Nifty Outlook:
- Nifty’s losses continued as it fell 2.5% for the week, dragged by FII selling, rising US bond yields, and a strong US dollar.
- Nifty is nearing a crucial support zone of 23,200–22,900, which aligns with its 52-week exponential moving average (EMA). Support at this level could trigger a bounce-back.
- The market remains oversold, and a recovery will depend on a decisive close above recent session highs.
- Sector Performance:
- Sectors like IT, pharma, and BFSI are expected to perform better.
- The infrastructure sector is oversold and could see a technical rebound.
- Technical Insights:
- The breadth indicator, which measures stocks above their 50-day SMA, has hit bearish extremes, signaling a possible short-term recovery.
- Bank Nifty is poised for a rebound, with support at 49,300 and resistance at 52,600.
Stock Pick of the Week: Larsen & Toubro (L&T)
- Buy Range: ₹3,530–₹3,630
- Target Price: ₹4,060
- Stop Loss: ₹3,340
According to Shah, L&T is a strong buy due to its technical position and potential to bounce back in the oversold infrastructure sector.
Key Events to Watch This Week:
Domestic Developments: Maharashtra Assembly elections on November 20.
Global Cues:
- US bond yields, dollar index performance, and unemployment claims.
- PMI data from the US.
- Japan’s inflation numbers.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
