Weekly market update, Oct 27, 2023

The India benchmark indices declined for the second week in row due to multiple factors namely weakness in the global equity markets, concerns over higher U.S. Treasury yields, escalating geopolitical tensions in the Middle East and monthly futures and options expiry. However, further losses were restricted as domestic equities snapped a six-day losing streak and went up on bargain hunting. The S&P BSE Sensex fell 2.47% and NSE Nifty 50 was lower by 2.53% this week. On the other hand, the BSE Midcap index fell 2.41% this week while the Smallcap index was lower by 3.43%. On the BSE Sectoral front, all the sectoral indices closed the week in red. Realty sector fell the most by 3.24% amid worries that sales bookings may decline due to higher interest rates.

Meanwhile, JP Morgan has upgraded India to ‘overweight’ from ‘neutral’. The brokerage has advised investors to use near-term correction/dip as an opportunity to add and leverage on a positive historical seasonality to general elections. It further noted that India offers the strongest emerging market (EM) nominal GDP compounding (demographic trends, infrastructure investment needs) and has competitive risk-adjusted returns to developed market (DM) equities.

Analysts expect the market to continue with its volatile move in the coming week, and the week will be crucial from the domestic and technical point of view as investors will closely eye the ongoing Q2FY24 results along with key domestic and global events.

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