Week Ahead in the Dalal Street : 4th Dec to 8th Dec 2023
Synopsis
Positive Start Anticipated Ahead – post Election Result
Anticipation is high for a favorable market response following the BJP’s significant triumph in the state elections. Their resounding victories in Madhya Pradesh, Rajasthan, and Chhattisgarh on December 3 have positioned the BJP to lead in these three crucial Hindi heartland states. Meanwhile, the Congress secured a victory in Telangana, marking a diverse electoral landscape.
NIFTY Stats – Past
On December 1, the Nifty reached a fresh peak, concluding at 20,267.90, a 0.67 percent gain from the previous close. It surged to an all-time high of 20,285.15 during the session. Meanwhile, the Sensex closed at 67,481.19, marking a 0.74 percent increase, and coming within 400 points of its own record high at 67,927.
Market Week Ahead
India’s recent surge in growth, as acknowledged by S&P Global Ratings, appears to be more than just a fleeting occurrence. Many key indicators on the ground are converging to support this trend. The official GDP data reinforces this, revealing an impressive 7.6 percent growth in Q2 of 2023-24. Notably, the manufacturing and construction sectors played a significant role, highlighting the inherent strength of the economy.
This upward momentum can be attributed to strong corporate profits, increased government spending in anticipation of upcoming elections, and a thriving financial sector. These factors found solid backing in more accessible lending standards and a surge in credit growth.
The financial markets also responded positively in the past few days, buoyed by a statement from a key Fed official hinting at potential rate cuts if inflation continues to decrease. All eyes are now on the upcoming RBI meeting.
Another noteworthy development is the surge in Foreign Institutional Investors (FII) investment in Indian bonds, reaching a two-year high in November. The appeal lies in better yields and India’s inclusion in the JPMorgan index, thrusting the Indian bond market into the global spotlight.
Shifting gears to the climate front, significant discussions are taking place in Dubai to address environmental challenges at COP28. Building on previous negotiations, the conference is earnestly working to bridge gaps between developed and developing nations, tackling contentious issues such as climate finance.
As we enter a new week, the uncertainty in the investment landscape has intensified. Wondering how to navigate this investing game? These hints below will be helpful for you.
Global Cues to watch out for this week
December 4 – Monday
- Keep an eye on the US manufacturing scene! September saw a robust 2.8 percent growth in new orders for manufactured goods, surpassing expectations.
- Now, the question is, can this momentum continue? Find out with the release of October numbers this Monday.
December 5 – Tuesday
- Dive into the data on Tuesday! The S&P Global India Services PMI eased to 58.4 in October from 61 in September due to subdued demand and price pressures. Despite this, new business marked its twenty-seventh consecutive month of growth.
- The Composite PMI for October also stood at 58.4, maintaining expansion. Stay tuned for the November figures.
- Check in on China too! The Caixin China General Service PMI nudged up to 50.4 in October, signaling the tenth straight month of growth in services activity.
Did the positive trend continue in November? All will be revealed on Tuesday.
December 6 – Wednesday
- Shift your focus to the US crude oil market on Wednesday! In the week ending November 24, crude oil inventories increased by 1.6 million barrels, contrary to market expectations.
December 7 – Thursday
- Get the pulse of the US labor market on Thursday! Initial jobless claims rose by 7,000 to 218,000 in the week to November 25, slightly below expectations.
Keep an eye on the incoming numbers for a deeper insight into the health of the US job market.
December 8 – Friday
- Cap off the week with a crucial decision! The Reserve Bank of India is set to announce its policy decision on Friday.
- In October, the benchmark repo rate remained steady at 6.5 percent as policymakers aimed to balance inflation and support economic growth.
Stay tuned for insights from the six-member MPC meeting.
NIFTY Stats – Current Week – Probabilities
As per experts analysis, NIFTY may test 20,500-20,800 levels this week.
NIFTY Key Levels
The Nifty’s pivot point calculator suggests that it could encounter initial hurdles at 20,289, then at 20,314, and 20,356. Conversely, it may find support at 20,207, followed by 20,181 and 20,140 levels on the downside.
NIFTY Bank
On December 1, Bank Nifty took a brief pause but quickly resumed its upward momentum, gaining 332 points to reach 44,814. The day’s bullish candlestick pattern and a consistent pattern of higher highs and higher lows over five consecutive days marked a positive trend. The weekly performance was notable, with a 2.4 percent rally and the formation of a substantial green candle on the weekly chart.
According to the pivot point calculator, the index is likely to encounter barriers at 44,926, 45,025, and 45,185, with potential support levels at 44,606, 44,507, and 44,346 on the downside.
Disclaimer: All information provided above are informational and educational purpose. Please review from your end before taking any market action.