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19 Nov 2024
The benchmark Sensex ended a six-day winning streak on Friday due to significant selling by foreign portfolio investors (FPIs) and losses in Reliance Industries (RIL). The 30-share index closed at 77,210, down 269 points or 0.4%, while the Nifty finished at 23,501, down 66 points or 0.3%.
During the previous six sessions, the Sensex gained 1,022 points or 1.34%, closing at record highs for five consecutive days due to foreign fund buying and optimism about economic growth. Despite Friday’s decline, the Sensex gained 0.3% for the week and the Nifty added 0.2%.
Experts attributed the market's decline to profit booking and weak global cues. Concerns about valuations and the fallout from French President Emmanuel Macron's snap election decision also weighed on investors.
Additionally, disappointing Eurozone manufacturing numbers contributed to the negative sentiment. The snap poll in France raised concerns about economic recovery if far-right leaders win the elections.
On Friday, FPIs were net sellers, offloading shares worth Rs 1,790 crore. However, they bought shares worth Rs 10,210 crore during the week. Markets have rebounded sharply after a 6% drop on election result day, with investor sentiment bolstered by the National Democratic Alliance's support for Prime Minister Narendra Modi, ensuring governance continuity. Recent upgrades to India’s economic growth outlook have also attracted foreign investors.
Future market direction will be influenced by the earnings season and the Union Budget. Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, suggested that the market is likely to remain steady and consolidate at higher levels in the near term.
Budget-related sectors are expected to stay active due to news flow and anticipated growth-focused policies. Sectors like fertilizers, gaming, and oil and gas will react to the GST council meeting outcomes scheduled over the weekend.
The market breadth was mixed, with 1,784 stocks advancing and 2,086 declining. RIL fell 1.3%, significantly contributing to the Sensex's decline, followed by Larsen and Toubro, which dropped 1.8%.
Ajit Mishra, SVP Research at Religare Broking, recommended selective stock picking during this period and accumulating high-quality stocks, while keeping an eye on global market performance in the absence of major domestic events.
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