Indian markets rally for the fourth consecutive week, IPOs steal the spotlight

Indian markets retained their positive trajectory, closing the last week in the green, marking the fourth straight weekly gain. Despite this upward move, markets exhibited a confined trading range with an optimistic undertone. Analysts attribute this trend to the prevalence of profit booking, driven by a notable shift in investor attention towards the primary market, marked by a series of eagerly awaited IPOs scheduled for the week.

Also Read: Tata Technologies IPO sets record! Attracts over 50 lakh applications on issue

The primary market stole the spotlight last week, with a lineup of IPOs capturing investor interest. Tata Technologies IPO, as expected by the street, witnessed robust demand from all sections of investors.

This landmark issue marked the group’s return to the IPO arena after nearly two decades, with Tata Consultancy Services (TCS) being the last Tata Group IPO in 2004. The three-day bidding window, from November 22 to November 24, witnessed a phenomenal subscription of 69.43 times, showcasing widespread investor confidence.

Also Read: IPO pulse on D-Street: ₹2.5 lakh crore raised by 5 issues in week-long frenzy

The IPO frenzy extended beyond Tata Technologies, with other issues like Gandhar Oil, IREDA, and Flair Writing Industries experiencing robust demand from investors. Fedbank Financial Services, which initially garnered a muted response, witnessed full subscription on the third day.

Amid this backdrop, the Nifty 50 concluded the previous week with a modest gain of 0.32%, settling at 19,794 points, gaining for the fourth straight week, while the S&P BSE notched up 175.31 points, marking a 0.27% increase and closing at 65,970 points.

Among sectoral indices, Nifty Auto, Nifty Pharma, and Nifty Auto achieved new all-time highs in the preceding week. Concurrently, the surge in mid and small caps persisted, with the BSE MidCap and BSE SmallCap indices posting gains of over 0.5% last week.

Also Read: FPI holding in Indian stocks hit a 10-year low of 16.6% in November

Vinod Nair, Head of Research at Geojit Financial Services, said, “Domestic indices traded within a range throughout the week with a positive bias. The Fed Reserve adopted a cautious stance, and the muted trend in European and German markets was also echoed in domestic markets. Declining inflation and recent cooling job data in the US, along with easing US bond yields, attracted foreign funds to the emerging market,” said Vinod Nair, Head of Research at Geojit Financial Services.”

“The broader Indian market experienced some profit booking as investor attention shifted to the primary market, marked by a set of IPOs scheduled for the week. Sectors such as consumer durables and realty took the lead, driven by a strong rebound in festive demand. However, the IT sector showed subdued performance in response to weak global data. Despite the RBI’s scrutiny of unsecured lending by NBFCs, the banking index demonstrated resilience this week,” he added.

Nifty 50: Key Levels to Watch

Rupak De, Senior Technical Analyst at LKP Securities, notes that the near-term support level for the Nifty 50 is at 19,700 points. As long as there is no breakout, the index is anticipated to maintain a sideways movement. Rupak De suggests that a drop below 19,700 could potentially trigger a market correction.

Conversely, a clear move above 19,900 might signal a substantial rally, potentially propelling the index towards a new all-time high, he added.

Another volatile week for crude oil

On the commodity front, Brent crude futures experienced another volatile week, dropping by 0.47% to reach $80.23 per barrel, and this month so far, Brent crude futures plummeted 5.63%. WTI crude futures, on the other hand, saw a marginal gain of 0.16% to $76.16, and for the November month, it is down by 5.39%.

Several factors contributed to the decline in crude oil prices, including a larger-than-anticipated build-up in US oil inventories, sluggish economic activity in the EU and China, and the International Energy Agency’s indication that global oil markets may not be as tight as initially projected for this quarter.

Additionally, the unexpected delay in the policy meeting on output by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) has raised questions about the future course of crude production cuts.

Rupee Struggles

While domestic indices maintain positive ground, the Indian rupee faces headwinds, depreciating by 6 paisa to close at its all-time low of 83.40 against the US dollar on Friday.

Also Read: Rupee ends at record closing low of 83.37 against the US dollar

The domestic unit finished last week with a drop of 0.12% at 83.34.

Insurance stocks lead the charge

In a week marked by overall subdued market activity, a notable eight Nifty 500 stocks demonstrated remarkable resilience, surging between 10 and 37%. The standout performers were primarily from the insurance sector, led by The New India Assurance Company, which recorded an impressive rally of 37.6% last week.

The bulk of these gains materialized during Friday’s session, propelling the stock from ₹151.7 apiece to ₹209.40, a new 52-week high.

Following suit, General Insurance Corporation of India also rallied, witnessing an 18.6% surge. The stock reached a new 52-week high on Friday’s session at ₹316, closing the week at 307 apiece.

Shares of LIC shares recorded their best intraday gain during Friday’s session. The insurance giant experienced a significant 9.7% jump, reaching ₹677.65 apiece and hitting an intraday high of ₹682 during the trade. Overall, the stock finished last week with a gain of 10.25%.

Also Read: LIC shares jump 9.7%, logs biggest intraday gain since listing; here’s why

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities, said, “Despite muted markets, PSU Insurance shares of LIC, GIC, and New India Assurance surged up after a long haul, mainly on the back of reports stating that the industry growth outlook was “positive” from “stable.”

“LIC has also projected double-digit growth over the last year and plans to launch new attractive products. New India Assurance zooms in after the insurer said analysts and institutional investors will meet senior management in Mumbai on November 29. GIC shares are also in demand after the company said that AM Best reaffirmed the existing ratings and additionally assigned the India National Scale Rating (NSR) to the company.”

“Technically, LIC can retest 680 levels, after which we can expect some sort of profit-booking attempt, while in GIC it can test 330 in the near term, and NIACAL zoomed to 205 with a target to test 220 in the near term,” he added.

Other stocks, including RattanIndia Enterprises, Latent View Analytics, Sterling and Wilson Renewable Energy, Vardhman Textiles, CG Power, and Industrial Solutions, have yielded returns between 10 and 25.1% during the last week.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.