Market rally extends to fourth week; 30 small-cap stocks rise 10-23 percent

The market extended the winning run for the fourth consecutive week ended November 11 amid supporting global markets, robust earnings, continued FII buying and stronger rupee.

This week, the BSE Sensex gained 844.68 points or 1.38 percent to close at 61,795.04, while the Nifty50 rose 232.55 points or 1.28 percent to close at 18,349.7 levels.

Among sectors, Nifty PSU Bank index rose 6.5 percent, Nifty Information Technology index added 3 percent and Nifty Bank and Metal indices added 2 percent each. On the other hand, Nifty Pharma index shed 3 percent and Nifty Auto index slipped 1.7 percent.

During this week, BSE Small-cap index declined 0.4 percent, BSE Mid-cap index fell 0.7 percent, while BSE Large-cap index added 1 percent.

“We started off on a positive note on Monday, but with some intraday swings on both sides. The Nifty managed to reclaim 18,200 on the same day. This was followed by a lull patch of nearly two days during which the markets looked a bit tentative at higher levels. However, the global markets made a strong comeback on Thursday on cooling inflation number. This resulted in reversing the tide for the biggest underperforming heavyweight space ? IT,” said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One.

“With the stellar rally on the US bourses, global sentiments got a boost overnight. The rub-off effect of the same was visible in our domestic market on Friday, as we not only opened with a strong bump up, but also managed to extend gains towards the 18,350-mark.”

“The benchmark index Nifty added more than a percent this week, and in the process, closed at the highest level in the calendar year. We are not surprised with this move as we have been quite vocal on how strong our markets are. Soon, we would see Bank Nifty crossing 42,000 to mark new highs. The banking index has finally achieved this milestone and soon we will see the Nifty following these footsteps,” he added.

Buying by foreign institutional investors (FIIs) continued this week too, as they bought equities worth Rs 6,329.63 crore, while domestic institutional investors (DIIs) sold equities worth Rs 2,255.91 crore.

The BSE Small-cap index shed 0.4 percent. TCPL Packaging, Honda India Power Products, Kamdhenu HLV, Future Retail, Sanghvi Movers, Neuland Laboratories, SMS Pharmaceuticals, FIEM Industries, Lumax Industries, MPS, Indraprastha Medical Corporation, Hindustan Foods, Timex Group India, KPI Green Energy, Swan Energy, Dhunseri Ventures and Ajmera Realty rose 15-23 percent.

Where is Nifty50 headed?

Ruchit Jain, Lead Research, 5paisa.com

With continuation of the ‘Higher Top, Higher Bottom’ structure, the support base for Nifty has now shifted to 18,150 followed by 18,000, while momentum in the index heavyweights could lead the index towards 18,500 followed by 18,700 very soon. Hence, traders are advised to trade with a positive bias and look for buying opportunities from a short-term perspective.

The heavyweights have taken the leadership while the Nifty Midcap and Smallcap indices are still trading below their swing highs. Hence, instead of anticipating reversals in the underperformers, traders should look to ride the trend with the heavyweights or sectors which are participating in this upmove.

Apurva Sheth, Head of Market Perspectives, Samco Securities

Globally, a flurry of economic data is due to be announced next week. Since the battle against inflation is far from over, market investors will be watching the inflation numbers from the United Kingdom and India with bated breath.

The UK’s unemployment rate would also be in the news since it was 3.5 percent in August, the lowest since 1974. In the United States, numbers for PPI, Industrial Production, and Jobless Claims are expected, which may impact market sentiments internationally.

Furthermore, China’s Industrial Production figures are set to be announced next week. There will be several fresh IPO listings on D-Street. Meanwhile, investors are curious to see if the market gains in the frontline indices persist.

According to chart patterns, Nifty may see bullishness if it maintains above 18,300 level, which would take the index up to the 18,600 level. If the index falls below 18,000, profit-taking will begin at 17,800, followed by 17,650. Investors are urged to maintain their upbeat outlook, and with other sectors now contributing, we anticipate strong broad-based buying in the next week.

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