Weekly Market Wrap: D-Street extends losses amid weak global macros. What lies ahead?

As many as 21 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 7.8 per cent, Tech Mahindra emerged as the top gainer in the index.

Top Nifty losers of this week, Hero MotoCorp, State Bank of India, and Apollo Hospitals, declined 7.2 per cent, 6.9 per cent, and 6.8 per cent, respectively.

Market experts suggest that on a near-term basis, the Nifty could stay in the 19,655-19,296 band while on a short-term basis, it could stay in the 19,796-19,201 band.

Extending the previous week’s losses, Indian equity benchmarks ended lower in the passing week after Fitch Ratings downgraded the US sovereign credit grade. Sentiments were also dampened when India’s retail inflation for industrial workers jumped to 5.57 per cent in June 2023 as compared to 4.42 per cent in May this year, mainly due to higher prices of certain food items. Besides, weak factory activity data from the Eurozone and China, and prolonged FII selling triggered by rising US bond yields caused widespread worries across the global markets.

The BSE Sensex slipped 439 points, or 0.7 per cent, at 65,721 during the week ended Aug 04, while the Nifty declined 129 points, or 0.7 per cent, to 19,517. Sector-wise, the BSE Information Technology index surged the most (3 per cent) during the week gone by. BSE Tech and BSE Healthcare indices have registered a gain of 2.1 per cent, and 0.4 per cent, respectively. On the other hand, the BSE Realty index has registered a weekly decline of 4.3 per cent.

As many as 21 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 7.8 per cent, Tech Mahindra emerged as the top gainer in the index. It was followed by NTPC (3.8 per cent), HCL Technologies (3.7 per cent), Infosys (2.8 per cent), and Coal India (2.8 per cent). Cipla, Adani Ports, Tata Consultancy Services, and Wipro also advanced by over two per cent. On the other hand, Hero MotoCorp, State Bank Of India, and Apollo Hospitals declined 7.2 per cent, 6.9 per cent, and 6.8 per cent, respectively.

Market Macros

Vinod Nair, Head of Research at Geojit Financial Services said the week began on a positive note, with hopes of an end to the policy tightening era due to cooling inflation worldwide. However, Nair said, “Negative news about the US rating downgrade, weak factory activity data from the Eurozone and China, and prolonged FII selling triggered by rising US bond yields caused widespread worries across the globe."

He added: “Increased concerns over the US economy forced investors to flee in search of safe haven investments, leading to a surge in the dollar index. Nonetheless, the domestic market recovered from the impact of weak global cues, gaining support from positive domestic earnings led by IT and pharma stocks." India's manufacturing activity remained robust, although it marginally moderated for the second consecutive month in July. On the other hand, the domestic service PMI exceeded market expectations, reaching a 13-year high, driven by a rise in new orders, particularly in international sales. Investors are awaiting the upcoming MPC meeting, where the RBI is expected to maintain its policy rates at 6.5 per cent, Nair said.

Market Outlook

Deepak Jasani, Head of Retail Research, HDFC Securities said, Nifty snapped a three-day losing streak on August 4. At close, Nifty was up 0.70 or 135.4 points at 19,517. Broader market indices rose in tandem with the Nifty even as the advance-decline ratio remained firm at 1.9:1.

Nifty bounced a little on Aug 4 on expected lines. It is in the process of a small pullback. On a weekly basis, the Nifty has fallen 0.66 per cent and the large upper and lower shadows on the weekly candlestick denote the tug of war between bulls and bears. On a near-term basis, Nifty could stay in the 19,655-19,296 band while on a short-term basis, it could stay in the 19,796-19,201 band, said Jasani.

Also watch: Hot stocks for next week: Bharti Airtel, Castrol India, Karur Vysya Bank, BHEL, SBI and more

Also watch: Q1 results next week: ITC, Adani Ports, ONGC, Coal India, Hindalco, Hero MotoCorp, other