After gaining for the six consecutive days, BSE Sensex and Nifty 50 ended this week nearly 2 per cent higher. BSE Sensex gained 70 points or 0.15 per cent to end at 46,960, while the Nifty 50 index gained 20 points or 0.14 per cent to settle at 13,760.55. During intraday, Sensex hit a record high of 47026.02, while Nifty 50 touched an all-time high of 13,772.85. Broader markets underperformed equity benchmarks. S&P BSE MidCap index ended 0.35 per cent down at 17,801, while S&P BSE SmallCap index fell 0.24 per cent to settle at 17,769. The top BSE Sensex contributors were Infosys, ICICI Bank, TCS, Reliance Industries (RIL), SBI, HUL and ITC, among others.
Narendra Solanki, Head of Research at Anand Rathi Shares and Stock Brokers
During the afternoon trade, markets continued to trade in red however nearing the closing session, markets recovered to trade in the green. Traders sentiment was improved as Icra pegged the contraction in the economy at 7.8% for 2020-21. Before the GDP numbers for Q2 were out, it had predicted the fall in the economy at 11%. The report said improving economic fundamentals, a bright outlook for the rabi season, and the visibility of vaccine availability are expected to strengthen demand. Further, the sentiments were also supported by the Finance minister Nirmala Sitharaman’s statement that strong decisions taken by the Modi government have ensured a steady flow of foreign direct investment (FDI) into the country which is far greater than what comparable economies have attracted during the pandemic.
Hemant Kanawala, Head – Equity, Kotak Mahindra Life Insurance Co. Ltd
FII has invested $14 bn since November and $21 bn in CY2020. India has received much larger flows as many other emerging markets like Taiwan, South Korea and Thailand have seen large outflows in CY2020. As the US dollar is expected to remain weak, FII flows in emerging markets and India are expected to remain strong. As most of the parameters are looking favorable, investors must pay attention to valuation. Nifty is trading at P/B of 3.9, which is close to all-time high since 2009. What it means that there is limited upside from valuation rerating and a lot of positive scenarios is priced in. The consensus is estimating high double digit growth in earnings in FY22 and FY23. Corporate earnings to be announced in January will give some indication if this is achievable. It may be advisable to add equities on correction to improve risk-return equation.”
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities
The Nifty-50 Index has gained 1.8% this week while the Nifty-Mid Cap 100 Index and BSE Small Cap Index have gained 1.9% and 1.4%, respectively. The market remained buoyant on earlier-than-expected deployment of Covid-19 vaccines, impending US fiscal stimulus and decreasing domestic Covid-19 cases. FIIs flows though strong have moderated some bit from the previous week. The average daily FII flows in the first four days of the week was Rs 3200 crore. Going forward expect FII flows to slowdown in the next two weeks as we head towards Christmas vacation. Markets could turn volatile next week due to the monthly expiry and lesser participation from FIIs. We expect Nifty-50 to consolidate between 13,000 & 14,000 levels till the end of this month.