Market ends lower in Samvat 2078, but these 24 midcaps gain 10-215%

The Indian equity market regained momentum and rose more than 2 percent in the week ended October 21, supported by positive global cues, healthy earnings, slower selling by foreign institutional investors (FII) and buying in largecap and PSU banking stocks.

For the week ended October 21, the BSE Sensex added 1,387.18 points or 2.39 percent to end at 59,307.15, while the Nifty 50 gained 390.6 points or 2.27 percent to close at 17,576.3 levels.

On the sectoral front, the Nifty PSU bank index added 11 percent, the Nifty Bank rose 3.7 percent and the Nifty oil & gas index climbed 3.4 percent. On the other hand, Nifty metal and media ended marginally lower.

For the week, the BSE largcap index rose over 2 percent, while midcap and smallcap indices ended flat.

“The domestic equity market saw upmove in the week before Diwali, partially supported by positive global trends. Sectoral indices like BSE Bankex, BSE oil & gas, BSE energy, BSE power and BSE auto outperformed the Sensex 30 and the Nifty 50 indices. Performance of the BSE metal index was lacklustre during the week,” said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

“The domestic equity market took note of the decent Q2FY23 earnings reported so far. Global markets were relieved to some extent by the easing of turmoil in the UK markets post the new UK Chancellor scrapping the UK government’s plans for tax cuts. However, high inflation and the possibility of recession in certain geographies remain concerns for the global markets.”

“In the near term, the domestic market will continue to track global developments and one can expect stock-specific movements amid the ongoing Q2FY23 results season,” he added.

Samvat 2078

October 21, 2022 was the last trading session of Samvat 2078. The year saw the Sensex losing 1.27 percent and the Nifty declining nearly 2 percent.

Among the broader indices, the BSE smallcap index fell 1.16 percent, the midcap index slipped 4.5 percent and the largecap index shed 1 percent.

During the week, FIIs bought equities worth Rs 1,324.34 crore, while domestic institutional investors (DIIs) bought shares worth Rs 3,569.49 crore.

In October, FIIs have, so far, sold equities worth Rs 8,653.92 crore, while DIIs bought equities worth Rs 11,624.54 crore.

“Despite the global weakness, the domestic sentiment was positive ahead of Diwali and the market showed its resilience, supported by a good start to the earnings season. The benchmark indices have been rising for the last six sessions, aided by stock-specific momentum in IT, banks, and FMCG,” said Vinod Nair, Head of Research at Geojit Financial Services.

“The rise in credit growth to a 10-year high of 17.94 percent YoY as of October added colour to the Bank Nifty with a gain of 3.8 percent, while PSU banks gained 11 percent during the week. Some profit-booking was also seen towards the end of the week as domestic investors maintained their cautious stance ahead of the truncated week.”

“On the global front, rise in UK inflation to a 40-year high of 10.1 percent in September added to fears of a more aggressive monetary policy by the central bank. As there are no major triggers for the next week, the market direction will be based on global sentiment and the earnings season,” Nair added.

For the week, the BSE smallcap index ended on a flat note. Exxaro Tiles, Suzlon Energy, Jammu and Kashmir Bank, HPL Electric & Power, Indian Bank, Binny, Elgi Equipments, South Indian Bank and Deepak Fertilizers added 15-30 percent.

On the other hand, Rajratan Global Wire, J Kumar Infraprojects, Nureca, DCM Nouvelle, Thangamayil Jewellery, Xelpmoc Design and Tech, Brightcom Group, Johnson Controls, HPCL, Waaree Renewable Technologies, HeidelbergCement India, FCS Software Solutions and Cosmo First lost 10-17 percent.

The BSE 500 index added 1.8 percent, supported by Suzlon Energy, Canara Bank, Indian Bank, Elgi Equipments, Deepak Fertilizers, Union Bank of India and Punjab National Bank.

“The Nifty was forming a base near the key weekly moving averages for the last three weeks. It had also taken support near the 200 DMA. The level of 17,000 acted as a crucial support. From there, the index took a leap in the week gone by,” said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.

“The index has reached the 61.8 percent retracement of the September fall and the daily upper Bollinger Band, which is a crucial resistance zone.”

“Despite multiple attempts in the last week, Nifty couldn’t sustain above 17,600. Thus, the index is preparing for a downward move again. It can tumble towards its key daily moving averages, which are near 17,300-17,200,” he added.

Where is Nifty 50 headed?

Apurva Sheth, Head of Market Perspectives, Samco Securities

The release of China’s GDP data early next week will be closely watched by investors around the world. Industrial production, quarterly retail sales, and monthly unemployment rates are also included in the set of economic indicators.

Market participants will also be looking at QoQ Advance data on the US GDP growth rate. As the Indian rupee depreciates to a record low, movements in INR-USD will be closely watched back home.

As quarterly results come in, market sentiment will be influenced. D-Street would greatly value any management insights that could be used to anticipate the earnings trajectory and future outlook.

The Nifty has immediate support at 17,330, just below the 17,250 level. The index is facing resistance at 17,800 levels, followed by 17,900 levels.

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