Market Outlook – November 2023
“Investors make
money, traders make money. Investors who behave like traders & traders who
behave like investors get killed.”
The global and domestic
markets made a smart come back in the
month of November’23 amid cheerful festive season and positive global cues.
Investor sentiments turned buoyant as concerns have eased post dovish Fed
commentary and strong economic data indicating that US Fed may not go with
further rate hike.
Broad-based rally was seen
in the month of November with Nifty gaining +5.5% for the month to close at
20,133 levels, while Nifty Midcap 100 / Nifty Small cap 100 indices,
outperformed with gains of 10.4%/12%.
DIIs recorded inflows of
Rs.12,762 crore, their fourth consecutive month of strong inflows. While FIIs
turned net buyers to the tune of Rs.5,795 crore after witnessing selling for
three consecutive months.
IPO market was too in
spotlight, with 10 main board IPOs worth Rs.14106cr open for subscription
during the month. Tata group led Tata Tech saw a record 7.34 million
applications and listed at premium of 140%.
BJP’s sweeping victory in
three of four states has also instilled confidence in the market as far as
political stability is concerned. We expect the market sentiment to get further
boost, and thus strengthen the prospect of a pre-election rally.
On sectoral fronts, all
the indices gained tracking positive global cues with Realty sector stealing
the show. Real estate Sector performed well following a huge surge in sales
& property registrations. FMCG and Banks & Financials witnessed modest
gains relatively.
Positives in November
- Israel-Hamas War
tensions reduced a bit after a temporary ceasefire. - Crude Oil scaled
down from 84$ per barrel to 70$ per barrel – highly positive for Indian
markets. - BJP won 3 key
states of MP, Rajasthan & Chhattisgarh, raising hope of a Modi re-election
in 2024 Lok Sabha elections – highly positive for Indian markets. - US 10-year
treasury yield corrected from 5% to 4.25% on dovish statements from Fed
Governors and continuity of pause in rate hikes in December meet as well. - RBI kept Repo
rate unchanged at 6.5% continued with “Withdrawal of Accommodative
Stance”. - Real GDP
growth projection for FY24 revised to 7% from 6.5% - GST collection of
Rs1.68 lakh crores in Nov 2023 were also buoyant.
What to look forward in
December
- Fed to kept rates
unchanged at 5.25-5.50% in their December policy meet, also providing clues for
future rate cuts. – Positive for markets. - Though valuations
nearing high zone, higher flows from FIIs and pre-election rally will keep
markets in uptrend. – Nifty target 21500.
December Forecast: Sentiments post BJPs victory in 3 key state elections
are pretty high now. Equity markets were justifiably anxious about the outcome
of state polls and what it portends for the 2024 general elections. With the
outcome overwhelmingly in favor of the incumbent BJP, the confidence of the
market in the current dispensation and political continuity post 2024 Loksabha
elections got a boost. This augurs well for macro and policy momentum for
India, which, at the moment, is seeing the highest growth among major economies
(both GDP as well as corporate earnings).
We expect market
sentiment to strengthen further and
the prospect of a preelection rally is quite strong now, in our view. We also
note that Nifty has given positive returns (8%-30%) six months into the
announcement of general election results (Nov to May) on five previous such
occasions (1999-2019).
Happy Investing!
