Indian Stock Market Report: December Week 4, 2023

Experts forecast Nifty to continue its uptrend, driven by strong macroeconomics, historical election trends, and positive global conditions.

Indian Stock Market Report: December Week 4, 2023
Experts forecast Nifty to continue its uptrend, driven by strong macroeconomics, historical election trends, and positive global conditions.

Weekly Market Snapshot

Sensex and Nifty 50 declined by about 0.5% this week, while BSE Midcap lost almost 1%, and BSE Smallcap declined by about 0.2%. Domestic sentiment positive on healthy macroeconomic prints; concerns over valuations trigger intermittent profit-booking.

Key Market Movements‌‌

  • Short-term positive trend persists despite premium valuations, backed by a strong revival in FIIs buying and stock-specific actions
  • Anticipation of a rangebound trade scenario with limited data points heading into the festive season and year-end.
  • Mid and small caps in the limelight, benefiting from ease in oil prices and anticipation of a potential rate cut in CY24.

Sectoral Movements and Stock Specifics‌‌‌‌

  • Nifty Realty and IT surged 2.55% and 2.27%, respectively.
  • Nifty Metal and Auto jumped 1.71% and 1.37%, while Nifty Bank fell 0.73%.
  • IT heavyweights - Infosys, Larsen & Toubro, HCL Tech, Wipro, and TCS - lead gains.
Weekly Stock Market Report 18th Dec'23 to 22nd Dec'23

Leaders and Laggards

  • 'Back Up' and 'BTST' were two of the best-performing models, with 8.67% and 1.24%, respectively.
  • 'Nifty Rider' and 'Sector Superstars' were two of the underperformers, with negative 2.07% and 2.26% returns respectively in the same period.
  • Coming to stocks, NLCINDIA, or NLC India Ltd, provided a monthly return of 24.88% as part of 'Alpha Ally' model, followed by TEXRAIL, or Texmaco Rail & Engineering Ltd, which returned 17.04% as part of 'Sector Superstars' model.
  • On the contrary, IFGLEXPOR, or IFGL Refractories Ltd, was the underperformer with negative 15.02% returns, followed by JINDALSAW, or Jindal Saw Limited, with negative 10.17% returns, both as part of the 'Sector Superstars' model.

Expert Insights and Market Outlook‌‌

  • Sampath Reddy, CIO, Bajaj Allianz Life Insurance

India's robust macroeconomic fundamentals contribute to market resilience. Strong GDP growth, moderating inflation, and a stable rupee drive the market rally. Nifty50 on track for a 20% gain, with mid-cap and small-cap indices delivering higher returns.

  • Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities

Anticipates the index to continue the uptrend heading into Lok Sabha Elections. Historical data suggests Nifty performs positively six months before election results. Targets Nifty at 24,500 in 2024, with favourable global conditions and declining US bond yields.

  • Vinod Nair, Head of Research, Geojit Financial Services

Expects Nifty50 to provide a return of 10-12% in CY24. Positive on H1CY24, anticipating a pre-election rally and stable global market conditions. Suggests a multi-asset investment strategy due to inexpensive valuations.

  • Jyoti Roy, Head of Equity Research, Sanctum Wealth:

Nifty trading at a P/E multiples of 21x, slightly higher than the ten-year average. Forecasts 8-12% upside for the markets over the next year with earnings growth expectations of 13-15% for FY2025. India is likely to be an attractive destination for FIIs in 2024, given reasonable valuations and stable earnings growth.

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