Fresh Highs: Indian Markets Rally on Softer Inflation and Investor Optimism Turn

Market Synopsis:

The Indian equity market exhibited a strong performance this week, culminating on September 13th with a fresh all-time high. The market’s upward trajectory was fueled by interest rate cuts by China, and the ECB. A softer-than-anticipated US inflation report raised expectations for an interest rate cut by the Federal Reserve. This positive sentiment translated into robust gains across key indices globally, as investors were buoyed by the prospect of a more accommodative monetary policy.

The Indian stock market saw strong performance during the week, with the Nifty 50 index rising by approximately 2%, while the Nifty Midcap 150 and Nifty Smallcap 250 gained 2.4% and 1.3%, respectively. On September 12th, the Nifty 50 and BSE Sensex reached new record highs of 25,433.35 and 83,116.19, respectively. The rally was driven by a combination of positive global and domestic economic indicators, as well as sustained interest from both domestic and foreign investors.

In terms of currency, the Indian rupee erased the previous week’s losses and ended marginally higher against the US dollar at 83.89 on September 13th, compared to its September 6 closing of 83.94.

Market Watch:

Top Gainers

Oracle Fin Serv: 13.04%

Bajaj Auto: 8.38%

Jindal Steel: 8.09%

Top Losers

Granules India: -19.34%

Power Finance: -8.40%

ICICI Lombard: -6.74%

Nifty Consumer durables: 3.73%
Nifty Oil & Gas: -2.6%

Major Market Developments:

1. The ECB cut its rate by 0.5 bais points to 3.5% and PBOC would cut the RRR for all the banks and expectation of rate cut by US FED. 
2. Jewellery stocks surge up to 18.5% as gold hits a record high of INR 75,670 per 10gm.
3. Zomato share price at a fresh record high, up nearly 193% from its 1-year low
4. OIL to invest 25,000 crore in clean energy for net zero emissions by 2040
5. Government raises import duty on edible crude oil & refined oil by 20%

FII & DII activity (net cash)

                              FII        DII

13 September- 2364, 2532

12 September- 7695, -1800

11 September- 1755, 230 

10 September- 2208, -275 

 9 September- 1176, 1757

Technical Analysis: 

This week, the Indian stock market opened at 25,150.50, facing resistance as it attempted to push higher amidst global economic uncertainties. Concerns over the US Fed’s potential rate hike and disappointing Q1 GDP figures from the US kept the market range-bound. Despite a brief breakout above the initial resistance at 25,433, the market struggled to breach the second resistance level at 25,650, with heavyweight stocks underperforming. The market found support at 24,950, closing the week without significant movement, suggesting a cautious sentiment. If the market can gather momentum with high-volume buying, it may indicate a potential upward trend. Overall, while the current indicators reflect a neutral stance, the market remains positioned to challenge its resistance levels.