Thanks to positive global cues, the domestic markets are likely to begin the week on a strong note. Gift Nifty at 19,454 indicates a strong gap-up opening of 150 points for Nifty future. Analysts expect the momentum to continue till Diwali.

Santosh Meena, Head of Research, Swastika Investmart Ltd, said this resurgence comes in the wake of a sharp decline in the US dollar index and US bond yields following the latest US Federal Reserve policy announcements. Additionally, despite multiple positive factors impacting the energy market, crude oil prices have cooled off, providing another boost to the Indian markets, he added.

“While geopolitical concerns persist, they have had limited impact on the market’s overall trajectory. The resilience of the global markets will be crucial in determining the sustainability of this positive momentum,” he further said.

On the domestic front, the upcoming release of Q2 earnings reports is expected to have a significant influence on market sentiment. Additionally, the flow of Foreign Institutional Investments (FIIs) will play a pivotal role. If FIIs shift to net buying, it could further propel the market’s upward movement.

Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said the FII selling trend witnessed in September and October continued in early November, too. In the first three days of November FIIs sold equity for Rs 3,063 crore through the cash market.

“This selling trend is unlikely to continue, going forward, since the main trigger for FII selling, the rising bond yields, has reversed. After peaking at 5 per cent on October 19, the 10-year US bond yield started to decline; during the last two days the decline has been steep, taking the yield down sharply to 4.66 per cent on November 3. The main trigger for this reversal in bond yields is the subtle dovish commentary from the Fed chief Jerome Powell that “despite elevated inflation, inflationary expectations remain well anchored.” The market has interpreted this statement as the end of the rate hiking cycle.

According to analysts, domestic macro numbers remain mixed.

Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd, said, “India’s Manufacturing PMI fell to 8 months low in Oct to 55.5 amid weak demand for some products and competitive pressure. India’s services PMI fell in Oct to 58.4 from 61.0 in sept due to unfavourable demand. India’s fiscal deficit for the first half of FY24 stood at Rs 7.02 lakh crore, 39 per cent of the target. Eight core infrastructure sector output expanded at 8.1 per cent in sept, slowest pace in 4 months, except fertilizer industry all seven sectors saw slowing output growth.

The Q2 earnings announced so far are in-line with the expectations. “IT sector posted weak results while banks which have the major contribution in Nifty50 index posted good results with strong asset quality and good margins. Consumer category underperformed due to slowdown in demand. Auto sector companies posted above expectation numbers due to improved margins,” he said.

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