Weekly market wrap: Indian equities soar to new highs amid cautious optimism

The Indian equity market reached new lifetime highs for the fourth consecutive week, showcasing resilience and optimism. However, the week also witnessed profit booking as investors remained cautious about the potential impact of rising Covid cases in certain regions of India. Here's a comprehensive wrap-up of the market movements and key highlights provided by SBI Securities.

Market performance

• Nifty and Sensex achieved remarkable milestones, touching 21,592 and 71,910 levels, respectively.
• Despite the highs, both Sensex and Nifty experienced a marginal decline of 0.5 per cent each.
• Broader markets showed mixed results with BSE Midcap losing 0.9 per cent, while BSE Smallcap saw a minor dip of 0.2 per cent.

Global economic landscape

• Economic data remained subdued during the week, with the US GDP growing at 4.9 per cent in Q3 CY23, slightly below the expectations of 5.2 per cent.
• Initial US jobless claims in the week ending December 16 rose marginally to 2.05 lakh, contributing to a stable labor market and a cooling US economy.
• US treasury yields stayed below 4 per cent throughout the week.

Foreign investments

• Foreign Institutional Investors (FIIs) continued their robust buying spree in Indian equities, netting Rs 11,458 crore during the week.
• Domestic Institutional Investors (DIIs) also participated actively, with a net buy of Rs 6,927 crore until December 21.

Outlook and recommendations

• The upcoming week is expected to be truncated, with global markets closed on December 25 for Christmas Day.
• Investors are advised to keep an eye on the consumer confidence data in the US on December 26 and the core sector output growth for November in India on December 29.
• Concerns regarding the new Covid variant JN.1 may linger, impacting the domestic equity market.
• SBI Securities suggests a "Buy on Dips" approach, especially focusing on rate-sensitive sectors like Banks, Auto, and Real Estate.

Technical levels

• The immediate support for the index is anticipated in the zone of 21,000-20,950.
• A sustainable move below 20,950 could trigger further profit booking.
• On the upside, the resistance is expected in the zone of 21,400-21,450.

Corporate news highlights

• Life Insurance Company granted a one-time exemption for achieving a 25 per cent minimum public shareholding until May 2032.
• Ashok Leyland secured an order for the supply of 552 buses from the Tamil Nadu State Transport Corporation.
• Positive prospects for mining and metals stocks as nearly 100 critical minerals blocks are to be auctioned by February 2024.
• Varun Beverages announced the acquisition of a South Africa-based beverage company (Bevco) and its subsidiaries.
• Suzlon Energy bagged an order to develop a 193 MW wind energy project in Gujarat.
• JB Chemicals and Pharmaceuticals entered into a trademark licensing agreement with Novartis.
• India Glycols received an order for the supply of 16.6 crore litres of ethanol, valued at Rs 1,164 crore.
• Devyani International made an entry into Thailand by acquiring 274 KFC outlets for Rs 1,066 crore.
• Bharat Petroleum approved a proposal for setting up a 400 KTPA polypropylene unit at its Kochi refinery.
• Mazagon Dock Shipbuilders signed a contract worth Rs 1,615 crore with the Ministry of Defence for offshore patrol vessels.

IPO update

• Innova Captab's IPO was subscribed 3.54 times on the second day of bidding, reflecting investor interest.
• The IPO aims to mobilise Rs 570 crore through a combination of fresh issues and an offer-for-sale (OFS).
• The pharmaceutical firm plans to utilise the funds for debt repayment and working capital requirements.
• The price band for the IPO is set at Rs 426-448 per share.
• As the year approaches its end, the Indian equity market remains dynamic, responding to both global economic factors and domestic developments. Investors are advised to stay vigilant and adopt a strategic approach to navigating the market landscape.

(Disclaimer: The views and recommendations made above are of individual analysts, experts, and broking companies, not of Republic. Investors are advised to check with certified experts before making any investment decision.)