In November 2023, the benchmark Nifty 50 index soared 6% in a stunning recovery, while the Nifty Smallcap 250 index gained over 10%. The Nifty Smallcap 250 increased by 10.22% last month, the Nifty 50 by 5.52%, and the Nifty 500 by 7.06%, as reported in the 'Global Market Snapshot' report by domestic trading firm Motilal Oswal.
When looking at performance over three, six, and twelve months, as well as a year, the Nifty Smallcap 250 and Nifty Midcap 150 indexes stand head and shoulders above the competition. Nifty Smallcap 250 was up 11.07% in the past three months, while Nifty Midcap was up 8.64%.
The two indexes have added 26.46 percent and 33.68 percent, respectively, in the past six months. Last but not least, even when looking at the past year, both indexes showed the greatest gains compared to other key indices, including the Nifty 50 and Nifty 500, as reported by Motilal Oswal. The gains were 32% and 37.31%, respectively.
The Nifty 50 index, an indicator of the health of the Indian stock market, rose by about 6% in November 2023. The Smallcap 250 index soared, capturing the spotlight with a remarkable 10% increase.
The month ended with gains for every single sector index. With a significant growth of over 18%, the realty industry stood out as the best performer. In contrast to October, when factor-based indices saw negative returns, November saw substantial gains for all factor-based indexes.
Momentum was the clear winner, with the greatest monthly increase of about 12%. In November 2023, the Nifty 500 index rose 7.1% as a whole, with the financial services sector continuing to be a major driver of the index's performance.
What drove the rally in November?
-In November 2023, there was a fifteen percent increase in the revenue collected from goods and services tax (GST). Monthly GST collections reached ₹1.68 lakh crore, marking the biggest yearly growth, as reported by the Ministry of Finance.
-As of the second quarter of fiscal year 2023–24 (Q2FY24), the world's fastest-growing major economy was India's, at 7.6 percent. D-Street and the Reserve Bank of India both had far lower expectations for India's GDP growth in the second quarter than what actually happened.
The Federal Reserve expressed confidence in the US economy despite high inflation by maintaining interest rates at 5.50 percent and indicating that rate hikes may not be imminent at the most recent Federal Open Committee (FOMC) meeting.
-Only in November did the US market exhibit surges of nearly 10%. The dollar index and US 10-year bond yields have been cooling off recently, which has been good for the market. These issues will be carefully watched since they can affect how the market feels.
Last month, FPIs and other foreign institutional investors (FIIs) bought Indian stocks after selling for two months in a row. The net investment from foreign portfolio investors was 9,001 crore rupees, while the sale of shares in September and October was more than 39,000 crore rupees.
Global Markets
-In the United States, the S&P 500 and NASDAQ 100 both gained roughly 9% and 11% in November 2023, respectively, with the IT & Financial Services sector accounting for the majority of the S&P 500's growth.
-Globally, both emerging and developed markets performed well, growing by roughly 9% and 8%, respectively. South Korea saw the most substantial increase, around 16%, followed by Germany and Taiwan, both of which increased by around 13%.
-Crude oil prices fell by roughly 6% in November as a result of increased geopolitical threats, weak US demand, and ambiguous Chinese data.
Technical View
“Markets extended gains for the seventh session in a row and rose nearly half a percent,” stated Ajit Mishra, SVP - Technical Research, Religare Broking Ltd. Following the initial surge, Nifty followed a range all the way to the finish, when it finally found support near the 20,937.65 mark, which is the upper band of that range.
There has been discernible progress in the index's driving sectors, but we can't rule out the prospect of consolidation at this time. It is important for traders to be focused on stock selection because sectors and stocks that were not actively traded in the past several months are now making a comeback. Finally, Mishra cautioned against placing contrarian bets if you think the market is about to crash.
Important Notice: The opinions and suggestions expressed in this piece are solely the product of individual analysts. This in no way reflects Mint's opinion. We recommend that anyone looking to invest get the advice of qualified professionals first.
Money Poise
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