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Weekly Musings – Index performance for week ended June 28, 2024

1 Jul 2024 , 09:48 AM

IT WAS ADVANTAGE LARGE CAPS

The week marked the third week in succession when FPIs were net buyers in equity. In the last 3 weeks since the Modi 3.0 government has been formed and has taken oath, the FPIs have infused $4.96 Billion, a clear sign of confidence returning to the India equity story. For the week to June 28, 2024, the big story was about the large caps ruling the roost?

In a month when nearly half the Nifty stocked touched their all-time highs, it was only obvious that the Nifty stocks should steal the show. If you look at the generic indices in the month of June 2024, it has been clearly a case of allocations coming back to India in a big way. The Sensex and the Nifty gained 2.4% and 2.2% respectively in the last week of June, while the mid-caps and the small caps lagged way behind.
If one were to look at the smaller indices in the last week of June 2024, the Nifty Next 50 gained just 0.58%, the Nifty Mid-Cap 100 gained 0.56% while the Nifty Small Cap 100 gained just 0.45% in the last week of June. The action was clearly in the larger stocks as investors continued to be sceptical about the valuations of the smaller stocks. After all, the large caps are trading at a fairly steep discount to the smaller indices.
What about the gaining sectors. With crude at $86/bbl in the Brent market, the oil stocks led by Reliance Industries gained a full 3.3% during the week followed by the IT sector at 2.7% for the week. Reliance has touched all-time highs and other oil stocks are also up in support. On the IT front, the stocks appear to be gaining from a weak rupee and also hopes that the Fed rate cuts should bring back tech spending to normal levels.
Banking, being the heavyweight sector in terms of Nifty weightage, lent support at 1.32% for the week with ICICI Bank leading the market to new highs. Banks have emerged as a play on the India consumer story. Other heavyweight sectors like autos and FMCG were also in the positive during the week. Metals were under pressure, but they hardly have a very significant impact on the Nifty performance.

The gist of the story in the week was that big allocations are just about coming back and if the FPI trend of net buying continues, then we could see the Nifty and Sensex at higher levels. Fow now, the focus has shifted to the large caps, but it is perhaps a matter of time before the small caps and the mid-caps also claw their way back. That would, of course, need a lot of support from the retail investors.

BSE SENSEX 30 INDEX – SPEEDS PAST THE 79,000 MARK

The table captures the movement of the BSE SENSEX 30 for the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	79,457.58	79,671.58	78,905.89	79,032.73
27-Jun-24	78,758.67	79,396.03	78,467.34	79,243.18
26-Jun-24	78,094.02	78,759.40	77,945.94	78,674.25
25-Jun-24	77,529.19	78,164.71	77,459.60	78,053.52
24-Jun-24	76,885.65	77,423.02	76,745.94	77,341.08
21-Jun-24	77,729.48	77,808.45	76,802.00	77,209.90
		Weekly Returns		+2.36%

Data Source: BSE

If you though the Sensex may be at dizzying heights, it continues to defy the laws of gravity. With banking, IT and oil & gas stocks surging in the week, the Sensex closed the week with gains of a whopping 2.36%. During the week, the Sensex touched a high of 79,672 and a low of 76,746. The Sensex closed the week 1,823 points higher. Now, 81,000 looks to be the next big resistance for the Sensex; but even that may not hold for too long.

NIFTY 50 INDEX – FPIS BUYING FOR THIRD WEEK IN A ROW HELPS

The table captures the movement of Nifty 50 index in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	24,085.90	24,174.00	23,985.80	24,010.60
27-Jun-24	23,881.55	24,087.45	23,805.40	24,044.50
26-Jun-24	23,723.10	23,889.90	23,670.45	23,868.80
25-Jun-24	23,577.10	23,754.15	23,562.05	23,721.30
24-Jun-24	23,382.30	23,558.10	23,350.00	23,537.85
21-Jun-24	23,661.15	23,667.10	23,398.20	23,501.10
		Weekly Returns		+2.17%

Data Source: NSE

In the last 3 weeks, the FPI flows have been very supportive of the Nifty with total flows of $4.96 Billion coming into equities. For the week, the Nifty closed with solid gains of 2.17% as the gains of banking, oil & gas and IT sector gave a boost to the large cap stocks. VIX also tapered to around 14.2 levels. For the week, the Nifty gained a total of just 510 points. For the week, the Nifty touched a high of 24,174 and a low of 23,350, eventually closing the week above the 24,000 mark. Overall, the Nifty showed a lot of strength in the week. Nifty is already in unchartered territory, so higher resistances would be psychological in nature.

NIFTY NEXT 50 INDEX – SHOWS CAUTIOUS GAINS IN THE WEEK

The table captures the movement of Nifty Next 50 for the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	71,536.05	71,829.00	71,365.15	71,523.45
27-Jun-24	71,204.80	71,578.20	70,654.35	71,340.65
26-Jun-24	71,271.10	71,520.10	71,032.55	71,235.80
25-Jun-24	71,915.70	72,049.35	71,257.30	71,360.85
24-Jun-24	70,944.85	71,693.10	70,383.10	71,642.25
21-Jun-24	71,847.40	71,878.25	70,970.80	71,111.80
		Weekly Returns		+0.58%

Data Source: NSE

In a week when the Nifty and the Sensex dominated the story of the markets, it is only obvious that the smaller indices would lag behind. The Nifty Next 50 index closed the week with gains of 0.58%, but more subdued compared to the Nifty and the Sensex. This week, the Nifty Next 50 touched a high of 72,829 level and a low of 70,383, before closing the week at 71,523. For the week as a whole, the Nifty Next 50 index gained just 412 points, largely because its mainstay sectors of defence and PSU stocks did not do too well.

NIFTY MID-CAP 100 INDEX – MODEST GAINS FOR THE WEEK

The table captures the movement of Nifty Mid-Cap 100 in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	55,577.50	55,927.60	55,552.05	55,736.90
27-Jun-24	55,382.65	55,681.10	54,975.80	55,424.25
26-Jun-24	55,427.05	55,521.35	55,168.25	55,245.80
25-Jun-24	55,764.85	55,922.95	55,269.25	55,368.55
24-Jun-24	55,309.65	55,683.10	54,857.75	55,577.05
21-Jun-24	55,748.00	55,854.75	55,322.95	55,429.15
		Weekly Returns		+0.56%

Data Source: NSE

After gaining nearly 6.8% in the first two week so June, the mid-cap index closed with gains of just 90 bps in the last two weeks of the month of June 2024. During the week, the advance / decline ratio came under pressure in the second half of the week, which was evident of pressure on mid-cap stocks. During the week, the Mid-Cap 100 index touched a high of 55,928 and a low of 54,858. The index is already hovering close to its lifetime highs and the index gained nearly 308 points for the week.

NIFTY SMALL-CAP 100 INDEX – DISAPPOINTED WITH SMALL GAINS IN THE WEEK

The table captures movement of Nifty Small Cap 100 in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	18,263.15	18,379.40	18,259.60	18,317.70
27-Jun-24	18,330.00	18,403.15	18,088.30	18,165.00
26-Jun-24	18,298.60	18,354.85	18,213.80	18,288.00
25-Jun-24	18,315.35	18,437.65	18,222.90	18,242.05
24-Jun-24	18,174.25	18,273.35	18,008.90	18,217.05
21-Jun-24	18,329.05	18,400.25	18,208.80	18,235.05
		Weekly Returns		+0.45%

Data Source: NSE

After rallying an impressive 9.3% in the first 3 weeks of June 2024, the small cap index gained just about 0.45% in a subdued fourth week, but still ended the month of June with hefty gains. For the week, the Nifty Small Cap index gained just 83 points. During the week, the index touched a high of 18,438 levels and a low of 18,009, but ended the week with some pressure in the last two days of the week. However, once the retail investors are back in a big way, we could see the small caps back on the radar.

BANK NIFTY INDEX – ANOTHER WEEK, ANOTHER SEDATE PERFORMANCE

The table below captures the movement of BANKNIFTY in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	52,874.95	53,030.30	52,242.30	52,342.25
27-Jun-24	52,980.30	53,180.75	52,639.00	52,811.30
26-Jun-24	52,653.20	52,988.30	52,373.70	52,870.50
25-Jun-24	51,759.45	52,746.50	51,747.65	52,606.00
24-Jun-24	51,280.25	51,783.95	51,138.90	51,703.95
21-Jun-24	51,927.30	51,934.35	51,224.95	51,661.45
		Weekly Returns		+1.32%

Data Source: NSE

Bank Nifty added 681 points this week. However, the gains of 1.32% in this week was much lower than the 3.32% gains in the previous week. Bank Nifty gained from hopes that the Fed would cut rates more aggressively in year 2025. While there are concerns that slow growth in NII and lower NIMs would impact banks; CLSA continue to be bullish on the private banking space. During the week, the Bank Nifty touched a high of 53,181 and a low of 51,139. The close for the week was decisively above 52,000.

NIFTY IT INDEX – WEAK RUPEE DRIVES IT SECTOR GAINS

The table captures the movement of Nifty IT index in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	36,154.20	36,334.65	36,041.20	36,157.50
27-Jun-24	35,289.25	36,191.20	35,105.70	36,123.70
26-Jun-24	35,484.05	35,593.95	35,336.00	35,406.55
25-Jun-24	35,146.65	35,468.00	35,004.85	35,426.90
24-Jun-24	35,067.75	35,282.00	34,918.15	35,143.80
21-Jun-24	35,474.35	35,875.30	35,061.00	35,200.30
		Weekly Returns		2.72%

Data Source: NSE

After gaining 1.74% in the previous week, the IT index gained another 2.72% in the last week of June. The gains in IT stocks was largely supported by a strong dollar and the rupee hovering close to its all-time lows. The dollar strength is largely an outcome of the weakness in the Euro, in the aftermath of the French crisis. The Nifty IT index closed with weekly gains 957 points. For the week, Nifty IT index touched a high of 36,335 and a low of 34,918. However, this week also saw the rupee recovering from its all-time lows.

NIFTY OIL & GAS INDEX – RELIANCE LEADS THE OIL & GAS INDEX HIGHER

The table captures the Nifty Oil & Gas index for the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	12,055.70	12,298.30	12,055.70	12,223.35
27-Jun-24	11,935.40	12,051.75	11,896.95	12,021.55
26-Jun-24	11,745.55	11,934.65	11,705.35	11,918.60
25-Jun-24	11,832.80	11,877.85	11,734.20	11,755.60
24-Jun-24	11,837.25	11,882.25	11,719.05	11,808.15
21-Jun-24	12,022.60	12,028.05	11,821.05	11,860.45
		Weekly Returns		+3.06%

Data Source: NSE

Afte3r struggling in the previous week, the oil & gas stocks led the surge in the last week, led by heavyweight Reliance Industries. The surge in crude prices helped the upstream and refining stocks with a promise of better gross refining margins (GRMs). With the oil market undersupplied, oil prices are likely to remain robust. For the week, the Oil & Gas index was up 363 points or +3.06% as aggressive buying was back in oil & gas stocks. The Oil & Gas index touched a high of 12,298 and a low of 11,719 levels in the week.

NIFTY AUTO INDEX – MODEST GAINS FOR THE WEEK

The table captures the movement of Nifty Auto index in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	25,160.55	25,339.15	25,119.65	25,200.60
27-Jun-24	25,025.65	25,249.55	24,841.85	25,191.40
26-Jun-24	25,260.50	25,293.80	24,999.60	25,018.90
25-Jun-24	25,363.65	25,505.75	25,205.50	25,250.25
24-Jun-24	25,033.95	25,350.85	24,861.30	25,309.80
21-Jun-24	25,344.80	25,437.35	25,016.90	25,092.30
		Weekly Returns		+0.43%

Data Source: NSE

After gaining 9.8% in the first 2 weeks of June 2024, the auto index fell -2.45% in the third week but gained a marginal 0.43% in the latest week to June 28,2024. While auto still continues to be the proxy for consumer demand and EV growth, there are concerns over rural demand in the light of the delayed monsoons. For the week, the Auto Index made a high of 25,506 and a low of 24,861; closing 108 points higher for the week.

NIFTY FMCG INDEX – PRE-KHARIF RALLY IN FMCG STOCKS

The table captures the movement of Nifty FMCG index in the week to June 28, 2024.

Date	Open	High	Low	Close
28-Jun-24	56,709.10	57,007.45	56,560.35	56,756.85
27-Jun-24	56,427.70	56,787.60	56,230.75	56,670.60
26-Jun-24	56,257.70	56,609.80	56,089.80	56,465.20
25-Jun-24	56,457.65	56,544.05	56,084.55	56,246.35
24-Jun-24	55,958.10	56,463.00	55,837.40	56,392.70
21-Jun-24	56,737.55	56,761.30	55,906.65	55,990.10
		Weekly Returns		+1.37%

Data Source: NSE

After rallying by a surprising 7.11% in the first week of June, the FMCG index fell by -1.26% and -2.16% in the next two weeks. In the last week of June, the FMCG index closed with 1.37% gains on the back of pre-Kharif demand boost hopes. During the week, the FMCG index touched a high of 57,007 and a low of 55,837.

Overall, the last week of June 2024 saw the large caps dominating the market movement with the smaller stocks trailing behind.

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