After consecutive days of market volatility, Indian equity indices showcased a strong recovery on 29th November 2024. Both the Nifty 50 and Sensex surged, driven by gains across sectors, particularly in telecom, pharmaceuticals, and auto stocks. The rebound comes as a relief to investors after yesterday’s sharp sell-off, primarily influenced by global cues and concerns over the Ukraine-Russia conflict and U.S. rate uncertainty.
Anticipation of GDP Data 29th Nov 2024.Â
Rumors suggest that FIIs were aware of weak GDP data before its release. The GDP data, which was expected to range between 6.5% to 6.7%, came in significantly lower at 5.4%, marking a massive decline. This underperformance in key areas such as manufacturing, mining, electricity, and industrial output added to market negativity.
Market Performance
The benchmark indices ended on a positive note:
- Nifty 50 rose by 216.95 points (0.91%) to close at 24,131.10.
- Sensex gained 759.05 points (0.96%) to settle at 79,802.79.
- Nifty Bank advanced by 148.75 points (0.29%) to finish at 52,055.60.
- Nifty IT increased by 177.50 points (0.41%) to close at 43,146.25.
- BSE SmallCap outperformed with a rise of 417.28 points (0.76%) to end at 55,199.86.
Sectoral Overview
Telecom led the recovery, with Bharti Airtel as the top gainer in the Nifty 50. The pharmaceutical and auto sectors also posted strong gains, reflecting improved investor sentiment. IT stocks, which faced pressure yesterday amid rate cut worries, showed modest gains today.
Top Gainers
- Bharti Airtel: ₹1,627.15 (+4.28%)
- Cipla: ₹1,533.90 (+2.76%)
- Sun Pharma: ₹1,780.90 (+2.69%)
- M&M: ₹2,966.10 (+2.33%)
- Adani Ports: ₹1,190.05 (+1.92%)
Top Losers
- Power Grid Corp: ₹329.40 (-1.27%)
- Shriram Finance: ₹3,019.65 (-0.79%)
- Hero MotoCorp: ₹4,761.70 (-0.46%)
- Apollo Hospital: ₹6,828.90 (-0.18%)
- Nestle: ₹2,234.65 (-0.07%)
Analysis of the Recovery
The market’s recovery today follows a sharp correction yesterday, where major indices were impacted by global uncertainties, including U.S. rate concerns and geopolitical tensions. The rebound in Bharti Airtel and pharma stocks highlights sectoral resilience amidst global challenges.
Outlook
From a technical perspective, Nifty 50 continues to hold its critical support level of 23,750, reinforcing a positive outlook for the short term. The broader market strength, as evidenced by the performance of mid-cap and small-cap stocks, further underscores investor confidence. However, global factors like U.S. inflation data and geopolitical developments remain key to shaping market trends in the coming sessions.
Investors are advised to keep a close watch on foreign institutional investor (FII) activity and global economic indicators, which could provide further cues for market direction. This recovery highlights the resilience of Indian equities, with sectors like telecom and pharma leading the way. Market participants are encouraged to maintain a balanced view, considering both global and domestic developments.
Why Did FIIs Sell Heavily Yesterday?
The heavy selling by Foreign Institutional Investors (FIIs) in the market on 28th November 2024 can be attributed to several potential reasons:
F&O Position Changes:
FIIs might have adjusted or sold their positions due to recent changes in Futures and Options (F&O) margins. This can cause volatility, especially towards the end of a contract cycle, as positions are squared off or realigned.
Sectoral Weakness:
Despite strong agriculture GDP and positive consumption-related data, the impact of weak industrial and manufacturing output weighed heavily on investor sentiment.
Year-End Profit Booking:
December historically sees FIIs booking profits as they prepare for year-end holidays and look for new investment opportunities. This aligns with their focus on rebalancing portfolios before the calendar year ends.
RBI Monetary Policy Meeting:
The upcoming RBI monetary policy meeting on December 6th is raising uncertainty. While rate cuts are unlikely, there is speculation about potential rate hikes, which could impact market sentiment further.
FIIs and DIIs Data for 29th November 2024
| Category | Date | Buy Value (₹ Crores) | Sell Value (₹ Crores) | Net Value (₹ Crores) |
|---|---|---|---|---|
| DII | 29-Nov-2024 | 15,201.68 | 9,478.34 | 5,723.34 |
| FII/FPI | 29-Nov-2024 | 14,786.35 | 19,169.90 | -4,383.55 |
Market Sentiment Analysis
Short-Term Support and Resistance:
Nifty 50 continues to hold the 23,500 support level, maintaining a neutral to slightly positive stance. A close above 24,300 keeps optimism alive, but failure to sustain this level could invite fresh selling.
Global Market Impact:
Although the GDP data was a disappointment, the global markets have not reacted too negatively. This offers some hope that the Indian market could stabilize soon.
Investor Strategy:
While FIIs are selling, Domestic Institutional Investors (DIIs) continue to inject liquidity, mitigating the broader impact. Retail investors should watch critical events like the RBI meeting and global cues before making significant moves.
Conclusion
Yesterday’s heavy FII selling was likely driven by GDP data expectations, F&O adjustments, and year-end profit booking. However, with DIIs stepping in and strong support levels holding, the market remains resilient. The upcoming RBI meeting and global developments will play a key role in shaping short-term trends. Investors are advised to stay cautious and track major levels like 23,500 (support) and 24,300 (resistance) to gauge the market’s direction.