Markets awaiting major cues this week

NSE Nifty jumped 501 points or 2.35 per cent to 21,854, and BSE Sensex rallied 1,385 points or 1.96 per cent to 72,086 during the week ended. The Nifty Mid-cap and Small-cap indices outperformed benchmark indices, rising 2.7 percent and 5.6 percent respectively. FIIs remained net sellers due to a spike in US bond yields to over four per cent, and expensive equity market valuations. They net sold around Rs2,000 crore worth of shares in the cash segment last week, but DIIs continued to provide strong support by compensating the FII outflow by a wide margin as they bought more than Rs10,000 crore worth of shares during the week.

In near term, FII inflows into the equity market will depend on the trends in the US bond yields and the equity market trends globally as well as in India. As was expected, the Interim Vote-On-Account Budget was devoid of any policy announcements. However, it indicated the policy intentions of the government in coming days and has also taken consolidation seriously by targeting for a 5.1 percent GFD/GDP in FY25. This is just an interim step towards the 4.5 per cent FD/GDP for FY26. The present government’s fundamental goal of policy making – to achieve inclusive growth and development remains intact. The government indicated that the focus is on the outcomes and not on outlays with an aspiration towards achieving socio-economic transformation. No tinkering with tax structure was seen and observers expect that in the full Budget that will be announced around June 2024, the government would not want to tinker with the tax structure further and continue to focus on compliance for generation of resources.

The Monetary Policy Committee (MPC) is expected to keep the Repo rate unchanged at 6.5 percent with a less Hawkish tone, but the commentary will be keenly watched in terms of hints about the beginning of the rate cut cycle and growth-inflation trajectory.

In the coming week, Bharti Airtel, Britannia, Nestle India, Power Grid Corporation, Tata Consumer Products, Grasim Industries, Hero Motocorp, Divi Laboratories, ONGC, Life Insurance Corporation, Lupin, FSN E-Commerce Ventures (Nykaa), Zomato, Tata Power, Ashok Leyland, Apollo Tyres, Manappuram Finance, Apollo Hospitals Enterprise, Biocon, Escorts Kubota, PFC, Aurobindo Pharma and MCX India will be among others to announce Q3 numbers.

Market Musings: Over-reacting to the news can poison your portfolio and sour your life. When you don’t watch the market every day, you can finally see with unquestionable clarity that what you would have expected to happen didn’t. The unexpected did. Several PSU or Railway stocks already up by 50 per cent to 400 per cent in 2023.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)