Sensex reaches an 11-week high on macro data and FII inflows, causing over 40 smallcap companies to rise 10–30%. Do you have it?

 Sensex reaches an 11-week high on macro data and FII inflows, causing over 40 smallcap companies to rise 10–30%. Do you have it?

The 30-share BSE Sensex closed at 67,481.19, its highest closing level since September 18, up 492.75 points, or 0.74 percent.

favorable macroeconomic data and ongoing inflows from foreign institutional investors (FIIs) supported the 30-share BSE Sensex, which closed at an 11-week high last week. Over 40 smallcap stocks saw double-digit increases in their stock prices in the range of 10–30 percent.

Regarding individual stocks, some of the smallcaps that experienced double-digit increases in share prices last week were Asian Energy Services, 63 Moons Tech, India Cements, Tanfac Industries, HBL Power, Shalimar Paints, Poonawala Fincorp, Dixon Technologies, Reliance Infra, MTNL, Bharat Dynamics, Chennai Petroleums, Finolex Cables, NBCC (India), Carisil, and others.

Weekly Market Print

The benchmark for domestic equities, the Nifty 50, set new records and had its best week in five months thanks to positive macroeconomic data and steady inflows of foreign capital that raised hopes for the outlook on interest rates globally. Also closing at a record high for the fifteenth straight session was the midcap index. Thirteen of the fifty Nifty stocks have increased since September 15, 2023, when they last saw a record high.

With the Nifty 50 recording its sixth consecutive weekly gain, the Sensex reached its 11-week high and closed at its highest closing level since September 18. Energy stocks drove the gains in blue-chips Nifty 50 and BSE Sensex, which increased 2.39 percent and 2.29 percent, respectively, to 473.2 points and 1,511.15 points, respectively.

A positive start was bolstered by pivotal involvement from index heavyweights, particularly the banking and financial group, thanks to favorable global signals. Throughout the week, all 13 main sectors saw increases, while small- and mid-caps with a stronger local emphasis continued to beat blue-chip stocks.

A decline in crude oil prices as a result of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreeing to smaller production cutbacks than expected by the market helped the oil and gas index rise 4.38 percent, making it the top weekly regional gainer.

"Markets surged to new highs this week, decisively breaking key resistance levels and closing firmly above the 20,000 level," said Vinod Nair, Head of Research at Geojit Financial Services. Encouraged by the forecasts of the European Central Bank, worldwide... The markets were showing signs of bullishness." "The rate-hike cycle has ended amid a backdrop of softening inflation."

The overall market did better, mid- and small-cap stocks shown resiliency, and there was no indication of exhaustion. "With lower inflation, investors remain optimistic about government spending and rising consumption, which will boost growth in H2FY24," Nair said.

While the benchmark Nifty 50 increased by 5.5% in November, the Nifty Smallcap 100 index increased by 12%. Conversely, the Nifty Midcap 100 index had a 10.4% increase in November. In 2023, the Nifty is up 12%, the Nifty Midcap is up 38%, and the Nifty Small Cap is up 46%.

final meeting

Following the unexpectedly good GDP numbers for India's July–September quarter, all-around purchasing sent local equities markets to a new high on Friday in the first session of December 2023.

During the intraday session, the benchmark Nifty 50 increased by 158.4 points, or 0.78 percent, to reach a new record high of 20,291.55. The Nifty 50 ended the day up 135 points, or 0.67 percent, at 20,267.90.

The Sensex gained 493 points, or 0.74 percent, to close the day at 67,481.19. Less than 1 percent, or 446 points, separated the Sensex from its all-time high of 67,927.23 points on September 15 of this year.

During the session, the mid- and small-cap indexes also reached fresh all-time highs. While the Nifty Smallcap 100 index reached a new high of 14,305.10, the Nifty Midcap 100 index reached an all-time high of 43,469.30.

At 43,382.40, the Nifty Midcap 100 index concluded 1.1% higher, while at 14,239.30, the Nifty Smallcap 100 index closed 0.48 percent higher. The BSE Midcap index reached a new record high of 34,631.35 throughout the day and concluded 0.96 percent higher at 34,586.76. The BSE Smallcap index reached a record high of 40,718.81 during the session and ended at 40,565.96, up 0.48 percent.

In which direction are the markets heading?

Analysts predict that market turbulence in the near future might stem from the outcomes of the state assembly elections that are scheduled for December 3 in Madhya Pradesh, Chhattisgarh, Rajasthan, and Telangana. Results for Mizoram will be announced on December 4.

The state elections that are coming up are seen as the semi-finals leading up to the assembly elections in 2024. A politically stable atmosphere may boost the market and inspire more confidence in investors. If the election results are unfavorable, the market may drop one to two percent, but this might be a buying opportunity as investors would be looking forward to the general elections in 2024, according to senior technical analyst Pravesh Gaur of Swastik Investmart Limited.

The BJP's resounding win, according to MK Global Securities, will solidify the belief that the party is well-positioned for the national elections in 2024. This is probably going to give the market surge even more momentum since, in the medium run, policy consistency will be seen as a positive economic shock.

The majority of exit polls on Thursday predicted that the Congress would capture Telangana and Chhattisgarh, while the BJP would dominate in Madhya Pradesh and Rajasthan.

According to Pramod Gubbi, founder of Marcellus Investment Management, "there could be some sharp reactions early next week, even though the state elections are largely a non-event for equity markets from a long-term perspective."

Prashant Tapase, Senior Vice President (Research), Mehta Equities Limited, said, "The good news is that the short-term technical outlook for Nifty remains bullish, with resistance at 20,500-20,751 and support seen at 20089-19909."

According to Ajit Mishra, SVP of Technical Research at Religare Broking Ltd., "we are eyeing the 20,500–20,750 zone in Nifty and expect the index to maintain 19,850–20,050 zone in case of any profit taking." Even while all industries are participating in the trend, optimism in the banking, FMCG, and IT sectors may result in specific outperformance, so position your trades appropriately.

"Even though the benchmarks have been routinely outperformed by the larger indices, we believe that this is the moment to exercise caution when selecting midcap and smallcap stocks and to favor high-quality names," Mishra said.