Hello Readers!
This week, the Indian markets witnessed significant milestones with key benchmark indices posting fresh all-time highs with extended buying from FIIs. and the Bank NIFTY reached new highs, surging 3.32% to mark its biggest weekly gain in 2024. Join us as we delve into the highlights of the week, how Indian markets made fresh highs despite a volatile week and mixed global markets along with exploring what lies ahead for investors and traders.
🧾In this Article
Cover story: Bank Nifty Breaks Records: A Week of Bullish Banking!
📈 Weekly Market Wrap-up
This past week has been characterized by volatility in India’s benchmark stock indices. Despite the ups and downs, the key indices managed to climb higher, marking the third consecutive week of gains and reaching fresh all-time highs thanks to FII inflows and a rally in banking stocks. However, Friday saw a slight retreat as investors decided to cash in on their profits. The SENSEX went up by 217.13 points (0.28%) to close the week at 77,209.90. Meanwhile, the NIFTY increased by 35.5 points, closing at 23,501.10, gaining 0.15%.
In the week ahead, the trajectory of Indian equity markets is expected to be shaped by a blend of internal political events, the monsoon’s progress, economic signals, and significant international benchmarks, including the US core inflation data.
Sector Spotlight
Among the sectoral indices, Bank Nifty stole the limelight making a record high of 51,957 during the week to finally close at 51661.45. It made its biggest weekly gain of 2024, by clocking a 3.32% gain. The index recorded its previous best weekly gain in December’23 when it registered a gain of 5.46%. Among the Bank Nifty stocks, Bandhan Bank stood out as the top performer this week with a robust 7.6% gain followed by IDFC Bank that ended the week with a notable 7.10% increase. FPI flow into private banks was the key reason for this upsurge.
Apart from bank, the BSE IT (1.88%), BSE Metal (0.42%) and BSE Realty (0.26%) were the only sectoral indices that ended the week with gains. BSE Oil and Gas (-2.53%) was the top losing sectoral index of the week, followed by BSE Consumer Goods (-2.02%), BSE FMCG (-1.88%) and BSE Healthcare (-1.42%).
Nifty 100 top gainers and losers
Top gainers
- Samvardhana Motherson: ₹187.52 (▲+7.39%)
- Vedanta: ₹469.95 (▲+5.11%)
- ICICI Bank: ₹1156.85 (▲+4.61%)
- Axis Bank: ₹1232.10 (▲+4.37%)
- HDFC Bank: ₹1665.40 (▲+4.25%)
Top losers
- ABB: ₹8397.35 (▼-6.92%)
- Hero MotoCorp: ₹5451.90 (▼-6.18%)
- Power Finance Corporation: ₹481.90 (▼-5.47%)
- Maruti Suzuki: ₹12168.35 (▼-5.31%)
- UltraTech Cement: ₹10662.95 (▼-5.12%)
FPI and DII Activity:
Foreign investors emerged as net buyers of Indian equities for three out of four trading sessions this week and pumped a total of ₹9,102.57 crore. Meanwhile, Domestic Institutional Investors (DIIs) continued their buying spree, making net purchase of ₹9,574.93 worth of Indian equities during the week. Both DII and FII were net buyers in 3 of 4 trading sessions this week.
Global Gossip:
Global markets exhibited mixed performances. But the highlight of the week was Nvidia, making the headlines yet again. The shares of the chip maker surged 3.4% on June 18, dethroning Microsoft and Apple, as investors increasingly place their bets on the chip-maker’s critical role in the AI market. Its shares closed at $135.58 taking Nvidia’s market valuation to about $3.35 trillion.
In the U.S., the Dow Jones rose 1.45% and the S&P 500 gained 0.61%, both in very bullish territory, while the Nasdaq remained flat. S&P and Nasdaq recorded their eighth positive week out of the past nine. Among the European markets, FTSE increased by 1.12% and the DAX by 0.90%, though the CAC dropped 1.67%. Asian markets were subdued with Nikkei 225 down 0.56%. The Straits Times edged up 0.26%, and the Hang Seng climbed 0.48%.
U.S. crude oil prices continued their upward trend for another week, surpassing the $80 mark per barrel, just second time since the end of April. As of Friday afternoon, the price hovered around $81, marking a significant rebound from the low of nearly $73 recorded on June 5.
Rupee Report:
The Indian rupee ended flat this week, after rising on Friday due to small inflows and exporters selling dollars, recovering from hitting an all-time low the day before. It ended flat at 83.54 on June 21 against its June 14 closing 83.56.
Gold Surges:
Gold prices held steady on Friday, poised for a second consecutive weekly rise amid sluggish U.S. economic data. Investors anticipate potential interest rate cuts by the Federal Reserve later this year. At 0139 GMT, spot gold traded flat at $2,358.31 per ounce, while U.S. gold futures nudged up 0.2% to $2,372.90. Prices peaked on Thursday to a two-week high, marking their strongest level since June 7. Gold has surged 12% so far this week.
🍟 Quick Bites
🛍️ Retail sales in India increased by 3% year-on-year in May, down from 4% in April, according to the Retailers Association of India.
🌐 NSE has introduced the Nifty India Tourism Index, tracking the tourism sector with 17 included stocks.
🍞 Amazon India has launched ‘Amazon Fresh,’ its grocery service, in more than 130 cities across India.
🏦 RBI has been honored with the Risk Manager of the Year Award 2024 by Central Banking, London, UK.
🌍 FDI to India dropped by 43% in 2023, contrasting with a global decrease of 2%, as reported by the UN.
Stocks in news:
💼 Axis Bank and its subsidiaries will increase their stake in Max Life Insurance to 19.99% from 19.02% for ₹336 crore.
🏦 SBI’s board has approved raising ₹20,000 crore through public or private issue of long-term bonds.
🏠 PNB Housing will raise ₹10,000 crore through non-convertible debentures via private issues.
🚗 Tata Motors’ Jaguar Land Rover will invest ₹1.9 lakh crore till FY 2028, primarily for product development, and Tata Motors will hike prices of its commercial vehicles by up to 2% from July 1.
🏦 Kotak Mahindra Life plans to open 40 branches across India in the next 3 months.
⛏️ Coal India auctioned 23 discontinued underground blocks to private miners.
🚁 HAL will consider the payment of final dividend in its board meeting on June 26.
🧑💼 Abdelaziz Toumi is now the CEO of Lupin Manufacturing Solutions.
🌍 HUDCO raised ₹20 crore from overseas lenders to enhance urban infrastructure.
🚄 RVNL received a ₹160 crore order from East Coast Railways to develop automatic block signalling systems.
🖥️ Wipro partnered with HanesBrands and GBST to enhance and expand their digital infrastructure.
💰 REC has set June 28 as the record date for its final dividend announced for the Jan-March quarter, which amounts to ₹5 per share.
🏢 NBCC received a ₹70 crore order from the Grid Controller of India for interior work in its new corporate office in New Delhi.
🤖 Infosys launched AI-powered marketing software Aster to enhance the effectiveness of marketing and sales operations.
🛒 Reliance’s Swiggy Instamart has partnered with Hamleys to deliver its toys through its quick-commerce service.
💊 Alembic Pharma received US FDA approval for its drug to treat hereditary swelling diseases.
✈️ Hindustan Aeronautics received an order request from the Defence Ministry for 156 light combat helicopters.
🍿 Zomato confirmed it is in talks with Paytm to acquire its movie and events business.
💸 Vedanta will raise up to ₹1,000 crore through non-convertible debentures via private issues.
🚚 Tata Motors has launched ‘Tata Motors Fleet Verse,’ a digital marketplace for its commercial vehicles.
🏅 Aditya Birla Capital will be the official sponsor of the Indian team in the Paris Olympics 2024.
🌐 Tata Communications raised a loan of ₹25 crore from ANZ, DBS Bank, and Export Development Canada (EDC) to achieve carbon emission targets.
🌱 Sustainability Corner
- The Global Trade Research Initiative (GTRI) warned on Wednesday that the EU’s new Ecodesign for Sustainable Products Regulation (ESPR) will raise costs and harm exports from developing countries. The ESPR mandates stringent sustainability standards for imports, including a Digital Product Passport for traceability.
IPO corner
Listings:
- Le Travenues Technology, that operates travel booking platform Ixigo, had a stellar debut on June 18th, listing at ₹138.10 a whopping 48.49% premium over its issue price of ₹93.
Ongoing or IPOs Last Week:
- IPO of DEE Piping Systems and Aasaan Loans got oversubscribed by 101.82 and 53.38 times respectively.
- Akme Fintrade IPO IPO oversubscribed by 55.12x.
Upcoming Mainboard IPOs:
- Allied Blenders & Distillers (Officer’s Choice) – 25th to 27th June
- Vraj Iron and Steel: 26th to 28th June
Upcoming SME IPOs:
- Petro Carbon and Chemicals Limited IPO – 25th to 27th June
- Divine Power Energy Limited IPO – 25th to 27th June
IPO News:
- 🚗 Hyundai India has filed for an IPO with SEBI to raise approximately ₹25,000 crore.
- ⚡ Ola Electric has received SEBI’s approval for its IPO to raise ₹5,500 crore.
- 💊 Emcure Pharma has received SEBI’s approval for its IPO to raise ₹800 crore.
Bank Nifty Breaks Records: A Week of Bullish Banking!
This week was a stellar one for Indian banking stocks! The Bank Nifty, a key index that tracks the performance of the 12 largest banking companies in the country, scaled new heights, reaching a record high of 51,215.50. That’s a jump of over 770 points, or roughly 1.5%, compared to the previous week. So, what exactly fueled this impressive rally? Let’s dive deeper and understand the factors at play.
A Perfect Storm of Positivity
Several factors contributed to Bank Nifty’s record-breaking performance. Here are some key drivers:
Positive Market Sentiment: The overall market sentiment in India has been bullish lately. Strong corporate earnings reports, coupled with optimistic economic forecasts, have instilled confidence in investors. This positive sentiment naturally spilled over to the banking sector.
Strong Earnings Season: Many leading banks, including HDFC Bank, ICICl Bank, and Axis Bank, reported healthy profits for the quarter. These positive earnings report reassured investors about the financial health and growth prospects of the banking sector.
Favorable Macroeconomic Conditions: The Indian economy is expected to rebound strongly in 2024, with GDP growth projections hovering around 7-8%.
This economic upswing is expected to boost loan demand from businesses and individuals, which bodes well for bank profitability.
Government Initiatives: The Indian government has been actively taking steps to bolster the banking sector. Initiatives like loan restructuring schemes and credit guarantee programs have helped improve the overall credit environment.
Heavyweights Lead the Charge
The rally wasn’t just broad-based; it was spearheaded by the banking sector’s big players. Banking heavyweights like IndusInd Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, and HDFC Bank all witnessed significant gains, ranging from 1% to 3%. Their strong performance significantly contributed to Bank Nifty’s rise.
Not All Sunshine and Rainbows
While the Bank Nifty’s performance was impressive, it’s important to acknowledge that the future isn’t all sunshine and rainbows. Here are some potential challenges to keep in mind:
Rising Interest Rates: The Reserve Bank of India (RBI) might raise interest rates in the near future to curb inflation. This could lead to higher borrowing costs for banks, potentially impacting their profitability.
Global Economic Headwinds: Global economic uncertainties, like the ongoing war in Ukraine and rising geopolitical tensions, could dampen investor sentiment and impact the Indian stock market, including the banking sector.
What Does This Mean for You?
The Bank Nifty’s record high is a positive sign for the Indian banking sector. It reflects investor confidence in the sector’s growth prospects. However, it’s crucial to remember that the stock market is inherently volatile. So, if you’re considering investing in banking stocks, do your own research, understand your risk tolerance, and consult a financial advisor before making any investment decisions.
Looking Ahead
Bank Nifty’s record-breaking performance this week has certainly grabbed headlines.
Upcoming key financial events for the week:
| Date | Event |
| 25-Jun-24 | – USD CB Consumer Confidence |
| 27-Jun-24 | – USD Final GDP q/q |
| – USD Unemployment Claims | |
| – USD Pending Home Sales m/m | |
| 28-Jun-24 | – USD Core PCE Price Index m/m |
| – USD Revised UoM Consumer Sentiment |