Following the significant downturn in October, where the Nifty 50 experienced its most substantial monthly decline of 2.84% in CY23, the index displayed remarkable resilience, staging a robust comeback in November. Impressively, within the last ten trading sessions, the index recovered all losses incurred in the previous month.
Looking at the overall performance in November, the index surged by 3.59% so far, with a substantial portion of the rally occurring in the last two trading sessions. The November gain represents the index’s most impressive monthly performance since April 2023, signaling a notable shift in market dynamics and renewed investor confidence.
In the preceding trading session, the Nifty 50 exhibited a notable rally of 1.19%. In today’s session, the bullish momentum persisted as it further gained 0.46%, reaching a level of 19,765.20, inching closer to the crucial 20,000 mark.
This rally was fueled by positive global and domestic cues, with notable factors including the drop in the US inflation rate to 3.2% in October. This development heightened optimism about a more measured approach by the US Federal Reserve to future rate hikes.
Also Read: RBI likely to maintain hawkish stance, keep rates unchanged in near-term
The fall in US 10-year yields to 4.5% and a substantial drop in the US Dollar Index further contributed to the market’s bullish momentum. In India, October’s Consumer Price Index (CPI) inflation eased to 4.87%, the lowest in four months.
Additionally, declining crude oil prices (Brent Crude), down 5.91% in October and an additional 4.56% this month, provided support to the markets. Notably, Brent crude futures plummeted 1.56% in the previous trading session on the back of larger-than-anticipated increase in U.S. crude inventories.
Also Read: Oil prices drop on record rise in US crude inventories, demand concerns; Brent at $81/bbl
Foreign institutional investors (FIIs), on the other hand, turned net buyers on Wednesday after a series of selling sessions.
Among sectoral indices, the Nifty IT index experienced a significant surge due to easing inflation concerns in the US and UK. This development instilled confidence among investors, leading to expectations of increased demand from these regions. Given that a substantial portion of IT company revenues are closely tied to the US and UK markets, this positive sentiment had a notable impact.
Over the last two trading sessions, the Nifty IT Index recorded an impressive rally of 5.34%, reaching the 32,273 level, coming closer to the 52-week high level of 33,402. Remarkably, all 10 constituents of the index concluded the last sessions in positive territory.
Also Read: Nifty IT gains 2.35% on drop in US inflation; Persistent Systems hits record high
Commenting on the recent performance of Indian markets Vinod Nair, Head of Research at Geojit Financial Services, said,” The Indian market continued its positive resurgence, tracking global gains. Softer than expected US inflation data and easing bond yields has bought optimism that spending will emerge like in technology.”
“Taking the cues further, IT stocks have shown a significant jump in the broader market. The market is sensing that export-based sectors like IT and pharma could be future winners. While cut in inflation will also benefits domestic placed staples and consumer sector,” he added.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 16 Nov 2023, 04:24 PM IST