The fag-end rally for the month was broad-based as capex-linked sectors like infra, capital goods, and industrials outperformed in expectation of a surge in new order inflows. Further, the decline in Brent crude also added to the positive sentiments.
During the month, about 130 smallcap stocks delivered double-digit returns with 27 of them gaining 25% or more. The returns went as high as 63% from Vimta Labs, which was followed by Avalon Technologies (62%), Banco Products (59.6%) and Pix Transmissions (58.71%).
In the same period, nearly 98 smallcaps declined in double-digits with Honasa Consumer, Kamadhenu Ventures, Kopran, Everest Industries emerging as the top losers, falling anywhere between 23-33%.
The midcap space, on the other hand, saw around 13 stocks rise in double-digits with Paytm leading the way after seeing a rally of nearly 19% in the month. Indian Hotels, Biocon, Laurus Labs, Ramo Cement, Coforge are other top gainers in the midcap segment.
Meanwhile, it was a mixed bag for the Sensex constituents as 15 out of the 30 saw their stocks decline even as the other half managed to log some gains. IT stocks including TCS, Tech Mahindra, Infosys, HCL Tech led the rally for the benchmark, while NTPC, Adani Ports, NTPC, Bajaj Finserv and Tata Motors were the laggards.The November month was detrimental for the Adani Group after the US Department of Justice and the US Securities and Exchange Commission (SEC) issued an indictment and a civil complaint in the US district court against Gautam Adani, Sagar Adani and other key functionaries of Adani Green Energy.The charges relate to allegations of securities fraud, wire fraud and violation of the SEC guidelines that led to materially false and misleading statements in the bond offering documents of Adani Green with respect to anti-bribery and anti-corruption policies.
Following the bribery allegations, the market capitalisation of Adani stocks fell by as much as Rs 2.2 lakh crore, but the recent rally erased most of the losses.
What’s December looking like?
As we approach the end of the calendar year, the markets will first react to the Indian GDP growth of 5.4%, which was slower than the projections. The second quarter earnings season was also below expectations, leading to a series of earnings downgrades for India Inc.
However, analysts expect the prospects of second half earnings to remain positive due to a good monsoon, festival and marriage season, which could slightly ease the impact of downgrades.
After dumping a massive Rs 1.04 lakh crore worth domestic equities in October, foreign investors slowed down in November at -Rs 39,315 crore. FIIs have reversed the selling for two days in the last week, but then returned to old ways. It will be interesting to see whether the FII selling momentum will further slowdown and will it in turn reverse to positive.
Investorsโ attention is also turned to US and Eurozone inflation indicators, which will influence central banksโ December policy rates.
“Stability in the market will depend on the steadiness of the incoming economic data next week, while the market is likely to witness some repercussions from the fall in Q2FY25 GDP,” said Vinod Nair, Head of Research at Geojit Financial Services
Further, there is an RBI monetary policy meeting scheduled later this month. Even though the consensus estimates show status quo, analysts say the probability of a rate cut in February is high due to the subdued growth in Q2.
Technically, the trend might remain sideways to positive in the short term, provided Nifty stays above 23,870. On the higher end, resistance is observed at 24,400-24,500, according to Jateen Trivedi of LKP Securities.
The Nifty rollovers – the carry forward of futures contracts to the next series – for November were higher than average at 79.3%. On the monthly expiry day, analysts said traders carried forward mostly bearish futures bets to the December series.
“The higher rollovers along with short buildup suggest that mostly short bets were rolled over and upside in the index may remain capped in the next few days,” said Chandan Taparia, head of technical and derivative research at Motilal Oswal Financial Services.
[With data inputs from Ritesh Presswala]
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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