India’s Nifty 50 Poised for Mixed Opening, Sensex Upbeat to Start the Week
India’s Nifty 50 and Sensex 30, the key benchmark indices, are expected to open the week on a cautious note this Monday. After a positive performance last week, driven by an upsurge in the banking and auto sectors as well as weak US Retail Sales data, the Indian indices are looking to consolidate their gains. Traders anticipate a relatively light economic docket in India, with the focus shifting to the release of the Fed Minutes from the US.
On Friday, the Nifty 50 added 0.59% to settle just below its all-time high of 22,126, while the Sensex 30 gained 0.52% to close near the 72,500 mark. Chinese markets reopened after a week-long Lunar New Year holiday, while US stock markets remained closed on Monday for Presidents' Day.
Gainers on the Nifty 50 on Friday included SBI Life Insurance, Mahindra & Mahindra, Bajaj Auto, WIPRO, and Adani Ports. Losers included Apollo Hospitals, Britannia, Power Grid, SBI Bank, NTPC, and Reliance Industries. Notable corporate news included the signing of a pact for electric vehicle components by Volkswagen and Mahindra & Mahindra, as well as the launch of Zerodha Gold ETF by Zerodha Fund House. Foreign investors have sold equities worth Rs. 6,993 crore in the last two days.
Last week, the Nifty and Sensex drew support from upbeat Indian data and impressive gains in the automobile and utility sectors. India's trade data for January showed a shrinking trade deficit of $17.49 billion, while US Retail Sales declined by 0.8% in January, worse than market expectations. The Indian WPI inflation dropped to 0.27% in January, missing the market consensus. Investors are now awaiting the release of the Fed Minutes from the February meeting.
The Nifty 50, launched in 1996 by the National Stock Exchange of India, is the most widely followed stock index in India. It provides investors with comprehensive exposure to 13 sectors of the economy through the weighted average share price of 50 of the largest Indian corporations. Factors influencing the Nifty's value include the performance of the constituent companies, government policies, interest rates set by the Reserve Bank of India, and external factors such as climate change and natural disasters.
Since its inception, the Nifty 50 has experienced various milestones. Its highest recorded level to date is 22,097, achieved on January 15, 2024. The index first closed above the 10,000 level on October 17, 2017. During the Covid pandemic, it recorded its biggest daily decline on March 23, 2020. On the other hand, its biggest gain in a single day occurred on May 18, 2009, following the Indian elections.
Major corporations included in the Nifty 50 are HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd, and Kotak Mahindra Bank. As the new week begins, market participants will closely monitor the performance of these companies as well as the overall economic landscape.
Analyst comment
Positive news: India’s Nifty and Sensex logged a weekly gain, led by an upsurge in banks and auto sector stocks and weak US Retail Sales data-driven dovish Fed expectations. The Nifty 50 settled just below its all-time high, and the Sensex 30 closed near a new record high.
As an analyst, it is expected that the market will see mixed movements this week, as traders await the release of the Fed Minutes from the US and a relatively light economic docket in India. The market could consolidate the previous week’s gains, with specific sectors like banks and autos likely to show strength. Foreign investors selling equities could impact the market.
