Tag: Russia

Short Covering:

A significant feature of the Friday rally of 557 points on the Nifty was the sharp spurts in many large cap stocks with some shooting up by more than 4 percent. This clearly indicates a short covering, which will keep the market resilient today.

PSU Comeback:

The sharp rally in PSU stocks follows the BJP-led Mahayuti alliance’s triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL, among others, surged in the range of 3-8 percent in an overall strong market.

Given the remarkable rise in the past year, PSU stocks have been at the receiving end for a host of reasons such as expensive valuations and softer-than-expected elections outcome. As early as last week, the share of public sector companies (PSUs) in India’s total stock market capitalisation declined to an 11-month low in November amid sharp corrections. In November, PSU firms accounted for 15.34 percent of India’s total market capitalisation — the lowest since December 2023

PSU Comeback: The sharp rally in PSU stocks follows the BJP-led Mahayuti alliance’s triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL, among others, surged in the range of 3-8 percent in an overall strong market.

Given the remarkable rise in the past year, PSU stocks have been at the receiving end for a host of reasons such as expensive valuations and softer-than-expected elections outcome. As early as last week, the share of public sector companies (PSUs) in India’s total stock market capitalisation declined to an 11-month low in November amid sharp corrections. In November, PSU firms accounted for 15.34 percent of India’s total market capitalisation — the lowest since December 2023.

Capex push:

With the elections over and the BJP gaining huge support from the results in Haryana and Maharashtra, the government will shift its focus to increasing spending.

These poll results, coupled with a strong monsoon-driven recovery in rural spending and expected strong kharif output, should slightly improve the demand outlook. Corporate earnings are expected to pick up modestly in the second half of FY25, with BFSI, capital goods and real estate being their preferred sectors.

 

 

1) Rally in IT stocks

 

The Nifty IT index jumped nearly 2%, driven by strong US labour market data. Initial jobless claims in the US dropped by 6,000 to a seasonally adjusted 2,13,000 for the week ending November 16, the lowest in seven months. This indicates that US job growth likely rebounded in November following a slowdown in October due to hurricanes and strikes.

2) Rebound in Adani stocks

 

Adani Group stocks recovered from early losses and rose up to 6% in midday trade on Friday. Ambuja Cement led the rally with a 6% jump, followed by ACC, which gained nearly 4%.

3) Buying the dip

 

Today’s rally in the equity markets also comes as investors capitalize on recent declines, with the Nifty index down over 11% from its recent peak. The mid-cap and small-cap indices have also corrected by around 12% and 9%, respectively.

As market sentiment shifts, buyers are seizing the opportunity presented by lower valuations, reflecting confidence in the long-term recovery potential of these segments

4) Global Markets

Indian equity indices surged, following the upward movement in global markets.

5) Rise in PSU bank stocks

 

Public sector bank stocks also contributed to today’s rally. Heavyweights like State Bank of India, Bank of Baroda, and Punjab National Bank led the recovery as investor confidence returned following Thursday’s sell-off.

The Nifty PSU Bank Index rose nearly 3%, reaching 6,509.2, reversing the losses from the previous session

1.⁠ ⁠The Adani saga

Several Adani Group shares hit their lower circuits in early trade on Thursday after Gautam Adani was indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme.

2.⁠ ⁠Concerns over weak Q2 earnings

Q2 earnings came out significantly weak. The July-September quarter numbers of the majority of companies disappointed markets.

Global cyclicals, such as oil and gas, along with metals, cement, chemicals, and consumers, weighed on earnings growth. Consumption has emerged as a weak spot, while select segments of BFSI are experiencing asset-quality stress. Weakness in government spending has also been one of the factors driving moderation in earnings.

3. Escalating geopolitical tensions

Fresh escalation in the Russia-Ukraine war has soured the market mood further. Russian President Vladimir Putin signed a revised nuclear doctrine on Tuesday, days after the US allowed Ukrainian use of longer-range missiles against Moscow.

4.⁠ ⁠Heavy foreign capital outflow
Foreign portfolio investors (FPIs) have been relentlessly selling Indian equities, which has been among the key reasons behind the recent market downtrend.

According to NSDL data, FPIs sold Indian stocks worth ₹94,017 crore in October, and they sold stock for an additional ₹25,942 crore in November till the 19th.

5.⁠ ⁠Technical factors
Nifty 50 is trading below its 200-day moving average of 23,575. The market structure is weak and the 23,100-22,800 levels are crucial.