Weekly market wrap: Indian benchmark indices continue record-breaking streak

SBI Securities attributes this positive momentum to a combination of favorable global cues, robust GDP data from the US and India, strong Foreign Institutional Investor (FII) buying, and a decline in bond yields and the dollar index.

The week saw the release of encouraging economic indicators, including the Q3 CY23 US GDP growth at 5.2 per cent, surpassing expectations. Meanwhile, India’s Q2 FY24 GDP exceeded consensus estimates at 7.6 per cent, with the core sector output demonstrating a robust 12.1 per cent YoY growth in October 2023.

Foreign investors continued their bullish trend, with FIIs turning net buyers in the cash market for the fifth consecutive session. The cash market witnessed a substantial net inflow, with FIIs buying Rs 16,708 crore and Domestic Institutional Investors (DIIs) contributing a net buying of Rs 2,906 crore during the week, as of November 30.

Looking ahead, the outcome of the recently concluded five-state elections, with results expected on December 3, is identified as a crucial event to monitor. Any unexpected outcomes may impact investor sentiments. Additionally, the Reserve Bank of India’s Monetary Policy Committee meeting scheduled for December 6-8 will be closely watched for insights into the future interest rate environment amid strong GDP readings.

SBI Securities suggests that the Nifty50 may test levels of 20,500 and 20,700 in the short term, while a downside is likely to find support in the zone of 20,050-20,000.

Corporate Highlights:

Automotive Sector

• Mahindra & Mahindra Ltd reported a 21 per cent YoY growth in total auto sales, with domestic tractor sales growing by 6.5 per cent YoY.
• Bajaj Auto Ltd achieved a 31 per cent YoY growth in total sales, driven by a 69 per cent YoY increase in domestic sales.
• Escorts Kubota Ltd recorded a 3.7 per cent YoY growth in total tractor sales, accompanied by a 20.9 per cent YoY growth in the construction equipment segment.

Infrastructure and Energy

• ITD Cementation Ltd secured a contract worth Rs 1,001 crore for Civil and Hydro-mechanical works of a 500 MW hydel power, pumped storage project in Andhra Pradesh.
• REC Ltd approved increasing borrowings from Rs 1.2 trillion to Rs 1.5 trillion for FY24 and an equity investment of Rs 14.3 crore in Hindustan Power Exchange Ltd.
• Philips Carbon Black Ltd approved the acquisition of Aquapharm Chemicals Pvt Ltd for Rs 3,800 crore, marking the company’s entry into global specialty segments.

Healthcare and Cement

• Aster DM Healthcare Ltd approved the sale of its GCC business to Alpha GCC Holdings Ltd for Rs 8,400 crore or $1.01 billion.
• UltraTech Cement Ltd acquired the cement grinding assets of Burnpur Cement Ltd for Rs 169.8 crore and announced a merger with the cement business of Kesoram Industries.

Other Sectors

• Tata Coffee Ltd approved a capacity expansion of its Vietnam-based subsidiary with an investment of Rs 450 crore.
• Jubilant Foodworks Ltd announced plans to acquire additional stake in DP Eurasia NV for Rs 670 crore.
• HG Infra Engineering Ltd’s subsidiary received an order worth Rs 1,303 crore from NHAI for the construction of the greenfield Varanasi-Ranchi-Kolkata highway.
• Tata Power Ltd’s renewable energy arm, Tata Power Renewable Energy Ltd, secured a 200 MW firm and dispatchable renewable energy project from SJVN Ltd
• The government’s initial approval of defense acquisition projects worth Rs 2.23 lakh crore, with 98 per cent sourced from domestic industries, is seen as positive for defense stocks.

Economic Indicators

• Indian GDP growth in Q2 FY24 stood at 7.6 per cent, surpassing consensus estimates of 6.8 per cent.
• Fiscal Deficit as of October’23 reached 45 per cent of the FY24 target at Rs 8.03 trillion.
• Core sector growth in October’23 was robust at 12.1 per cent YoY, led by electricity generation, coal production, cement production, steel production, and natural gas production.
• India’s Manufacturing PMI for November’23 recovered to 56.0, indicating strengthened client demand and favorable input prices.
• The US GDP growth in Q3 CY23 reached 5.2 per cent YoY, outpacing consensus estimates and suggesting a rapid economic expansion.