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Informist, Friday, Nov. 22, 2024

By Anjana Therese Antony

MUMBAI – After seeing sharp losses for almost two months now, some analysts believe that the Indian equity market will remain in a tight range next week, though unfavourable fundamentals may keep any gains under check. "The market is oversold now and may see some more recovery, though there are more chances for a fall in the near-to-short term," a head of research at a domestic broking firm said. Investors are likely to track the trend in global markets, particularly the US, for cues in the short term. 

Since Oct. 1, benchmark indices have fallen around 7%, primarily due to foreign outflows, slowdown in domestic earnings growth, rupee depreciation, aggravated geopolitical conflict in West Asia, higher chances of the US Federal Reserve going slow on interest rate cuts in the US and expensive valuations. 

Friday, the Nifty 50 ended 2.4% higher at 23907.25 points and the BSE Sensex closed 2.5% higher at 79117.11 points. The near-term support for the 50-stock index is pegged at 23850-23760 points and resistance at 24250-24380 points. The indices saw their highest intraday rise in five months and biggest weekly gain in eight weeks. The volatility gauge India VIX closed above 15 for the fourth consecutive session, indicating the near-term nervousness in the market. 

"Despite this upmove, 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 (West Asia) situation which is still awaiting resolution, local election results in crucial states are all factors that may have some impact on the markets in the coming week," said Joseph Thomas, head of research at Emkay Wealth Management, in a post-market note Friday. 

While some analysts believe that the impact of the conflict between Ukraine and Russia has ended, a few others believe it is too early to come to a conclusion about the same. In early trade, crude oil prices had risen after the conflict between Ukraine and Russia worsened. Russian President Vladimir Putin Thursday said Russia used a ballistic missile with a non-nuclear hypersonic warhead against the city of Dnipro in central Ukraine, Reuters reported.

The conflict between the two countries as well as Israel and Iran had pushed global crude oil prices higher due to concern about supply in the recent past. At 1753 IST, the Brent Crude futures traded on the Intercontinental Exchange was down 0.6% at $73.80 per barrel. 

The Adani group companies, shares of which are seeing volatility following the bribery case against Chairman Gautam Adani and some senior officials, are likely to remain under investors' radar. "The exit polls hinting at BJP winning in both the states (Maharashtra and Jharkhand) seemed to have boosted investors' sentiment in a big way and shrugged off the Adani controversy," said Prashanth Tapse, senior vice president of research at Mehta Equities, in a post-market note. Out of the 10 stocks of companies under the conglomerate, six closed higher and the remaining four extended losses Friday.  

Among specific stocks, Cochin Shipyard may rise as the company said it signed a memorandum of understanding with US-based company Seatrium Letourneau for jack-up rigs. Rail Vikas Nigam may also be in focus as the joint venture of the company got a letter of acceptance for a project worth INR 8.38 billion.  End

US$1 = INR 84.45

Edited by Akul Nishant Akhoury

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