Record advance, then retreat; Indian market in anticipation of ‘Repo’ – Indian Stock Market | Indian share market

by time news

International market The Indian market also posted record gains last week on the support and backing of foreign funds. The Nifty, which hit a new record high of 18,888 on Thursday, ended the trade at 18,696 points, paring last week’s gains to less than 1 per cent as it retreated on Friday amid buying by foreign funds.

The realty sector advanced 4 percent, metal sector advanced over 3.5 percent and IT, FMCG, infra and energy sectors advanced over 2 percent with Reliance leading the Indian market last week. 18,950 points is the main barrier of Nifty. Nifty’s next support is at 18,400 points. Budding Port Folio Investment Consultant Abhilash Puravanthuruth assesses the market’s new expectations.

∙ RBI rate

The market also expects the repo rate to rise at the RBI’s last policy review meeting of 2022, which begins tomorrow and ends on Wednesday. The RBI had announced the policy change in September by raising the key interest rate by 50 basis points to a three-year high of 5.90 percent.

Pressure can be expected in the sectors that may be influenced by interest rates like banking, finance, realty, auto etc. The market expects the Fed Chairman’s signal that the pace of US Fed rate hikes will slow down and India’s slow GDP growth may also be considered by the RBI.

∙ Fed Rate Hike Rate and World Markets

The Fed chairman’s indication that the US Federal Reserve will cut rate hikes gave US markets a big jump on Wednesday and sent the Dow Jones into bull territory. But according to the data released on Thursday, the US manufacturing PMI fell below 50, re-opening recession talks in the market, and the strong jobs data released on Friday, which was positive for the Fed, dampened the market’s enthusiasm.

Chinese inflation figures, US headline inflation figures and Eurozone GDP figures due out on Friday will be key for the market. Next week’s US inflation figures, the December 15 US Fed rate hike and the Christmas and New Year holidays will control the course of world markets in the coming weeks of 2022.

∙ Indian GDP and Exports

India’s GDP grew by just 6.3 percent in the last quarter, after growing 13.5 percent in the first quarter and 8.4 percent in the second quarter of the previous year. Rising raw material prices and export restrictions have dragged down India’s domestic output growth, as expected by the market. The market expectation was 6.2 percent.

India’s domestic output was affected by the slowdown in manufacturing and mining sectors in the last quarter. While higher interest rates may also weigh on GDP growth in the coming quarters, the market, along with the central bank, expects Indian GDP to grow by 7 percent year-on-year on the back of public spending and deregulation of exports.

Stocks and Sectors

∙ Union Budget, Infra, Cement and Metal Sectors are expected to see massive increase in infrastructure spending. Funds have already started buying infrastructure stocks. Along with L&T, stocks like HG Infra, IRB Infra, Dilip Buildcon etc. can also be considered.

∙ Although metal prices have started to recover in the international market, the fear of American industrial recession and the failure of Chinese covid-19 policy are tired for the metal. However, the metal sector is expected to improve on the back of domestic consumption.

∙ Central government’s waiver of additional export duty on steel may give steel stocks a boost. Steel stocks are also hopeful that China’s zero-covid policy may lead to a move in steel prices, which are down.

∙ Defense stocks are also in favor of the central government’s defense policy encouraging domestic defense companies, likely to allocate more money in the defense sector in the next Union Budget.

∙ Rail stocks and public sector stocks continue to advance. Privatization prospects along with better results also favor public sector stocks.

∙ Return of foreign funds also favors mid & small cap sector IT stocks.

∙ Gold advances on falling bond yields also favors gold mortgage stocks.

∙ The New Year-tourism season also gives hope for an upswing in hotel-liquor stocks.

Crude oil

Today’s decisions by oil producing countries will determine the price of crude oil. Oil bulls are hoping that OPEC will announce crude oil production curbs. Brent crude closed at $85.

gold

The international gold price, which ended the trade after crossing 1810 dollars on bond yield fall, is expected to support at 1780 dollars. Gold is also hopeful that bond yields may fall further.

Whatsapp Number: 8606666722

English Summary: Indian Stock Market Analysis

You may also like

Leave a Comment