The frontline indices grappled to gain momentum this week amid global uncertainties and lacklustre earnings by major companies so far. Despite this, railway PSUs have emerged as robust performers, delivering double-digit returns, with some boasting gains exceeding 55 per cent.
Among these, Rail Vikas Nigam Limited (RVNL) witnessed an outstanding rally of almost 58 per cent throughout this week. Today, the stock hit its 10 per cent upper circuit limit, reaching a new all-time high of ₹320.35 apiece, lifting the company’s market capitalisation to ₹66,793 crore. Notably, the company gained ₹24,356 crore in market value just this week.
On a broader view, IRCON International, RVNL, Ganesh HSG Corp, Dredging Corp, MSTC, Hudco, RailTel Corporation of India, RITES, Orient Paper, Sigachi Industries, Texmaco Rail, CEAT, and others are among the smallcaps that logged a double-digit rise in their share prices last week.
Markets’ Weekly Print
Benchmark indices recorded their worst week in over two months clocking the biggest weekly losses, according to market experts. Nifty bank also recorded biggest weekly fall in a year.
The biggest contributor to the fall of Nifty and Bank Nifty was HDFC Bank. Sectoral Indices posted a mixed performance with oil & gas sector gaining the most and Nifty Bank falling the most being the worst performer.
Indian IT stocks helped the benchmark indexes close higher on Friday, but not by enough to avoid a weekly loss after a three-session losing streak sparked by HDFC Bank’s disappointing results earlier in the week.
On Friday, the blue-chip index NSE Nifty 50 closed 0.75 per cent higher to 21,622.60 points, while the S&P BSE Sensex ended 0.7 per cent up to 71,683.23. They lost 1.24 per cent and 1.22 per cent, respectively for the week.
The benchmarks tumbled nearly three per cent from Tuesday to Thursday, mainly due to HDFC Bank’s slide following worries over its margins. Financial stocks slid 4.1 per cent this week.
On Friday, IT companies, which earn a significant share of their revenue from the United States, climbed after US labour data bolstered hopes of a soft landing for the economy, adding to the optimism after IT bellwethers flagged green shoots of demand recovery.
HDFC Bank, the heaviest-weighted stock on the indexes, tumbled 8.44 per cent on Wednesday — a day after reporting its October-December quarter results – in its biggest one-day slide since May 2020, on worries over its stagnant margins.
The substantial decline in the stock also predominantly triggered the freefall by equity benchmarks Sensex and Nifty 50 -leading to their biggest single-day percentage loss since June 2022 on January 17, dragged by across the board selling amid weak global cues.
Commenting on the markets’ performance, Santosh Meena, Head of Research, Swastika Investmart Ltd said, ‘’The past week witnessed continued volatility in the market, characterized by Nifty and Sensex ending with a substantial decline of over one per cent, exacerbated by Bank Nifty’s notable underperformance with a more than four per cent dip, primarily attributed to a significant 10 per cent drop in HDFC Bank’s shares post-earnings.
‘The aggressive selling by Foreign Institutional Investors (FIIs) following HDFC Bank’s results added further pressure to the overall market. Despite these challenges, the midcap and smallcap segments demonstrated resilience, outperforming largely due to robust domestic liquidity. Notably, PSU stocks, especially in the railway sector, sustained a bullish trend,” added Meena.
Previous Session
Domestic market benchmarks Nifty 50 and Sensex ended in the negative on Saturday, January 20, with shares of Reliance Industries (RIL) and Hindustan Unilever (HUL) among the top drags as their December quarter results failed to impress investors.
The 30-share Sensex pack closed 260 points, or 0.36 per cent, lower at 71,423.65, with 23 stocks in the red. Nifty 50 settled at 21,571.80, down 51 points, or 0.23 per cent.
Midcaps and smallcaps, on the other hand, ended higher, outperforming the benchmarks. The BSE Midcap index rose 0.46 per cent while the Smallcap index rose 0.41 per cent.
“Amid rising optimism about AI, US markets surged over the weekend. However, domestic markets exhibited a subdued trend influenced by extended holidays, low volumes, and weekly option expiration,” Vinod Nair, Head of Research, Geojit Financial Services said.
Profit booking was noted in IT and FMCG, while private banks witnessed selective buying post the recent sharp correction and stable Q3 earnings, Nair added.
Among sectors, FMCG and IT stocks suffered the most, while banks and financial services gained. Shares of HUL and Reliance Industries were under pressure after their December quarter results.
Reliance Industries posted a nine per cent rise in its December quarter net profit as a planned maintenance-induced weakness in oil business earnings was offset by stability in retail and telecom verticals.
Hindustan Unilever Ltd (HUL) on Friday reported an 1.08 per cent increase in consolidated net profit at ₹2,508 crore in the third quarter ended December 2023. HUL shares close 3.72 per cent down at ₹2469.30 apiece.
NSE and BSE on Friday announced holding normal trading sessions on Saturday as stock markets are closed on Monday, January 22 due to a public holiday in Maharashtra and as the central government observes a half-working day on the occasion of the inauguration of the Ram Temple in the northern city of Ayodhya.
Money markets and forex trading will also be closed on Monday. The stock market was earlier set to trade in two special sessions on Saturday as the exchanges looked to test out a failsafe system for trading.
Where are markets headed?
Geojits’ Vinod Nair said that foreign investors maintained a risk-off stance amid concerns over persistent interest rates and initial Q3 results suggesting a potential domestic earnings slowdown. Looking ahead, the interest rate decisions of the BoJ and ECB, along with US GDP data, are anticipated to drive market dynamics.
Rupak De, Senior Technical Analyst, LKP Securities said, “The overall consolidation phase may persist for the next few days or until the Nifty stays within the range of 21,500-21,700. Only a decisive breakout on either side could initiate a directional move. A significant decline below 21,500 might trigger a correction towards 21,300 and below. Conversely, a robust breakout above 21,700 is needed for a resumption of the uptrend.”
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 20 Jan 2024, 09:43 PM IST