• Domestic equity markets rose for the second consecutive week as key benchmark indices BSE Sensex and Nifty 50 rose 0.87% and 0.94%, respectively. The rally was broad-based as the mid-cap segment and the small-cap segment both closed the week in green.

• The markets rose after the Maharashtra state's current coalition government, led by the ruling party at the Centre, achieved a notable triumph in the state assembly election which raised expectations for an increased government spending and policy continuity with emphasis on infrastructure and capex.

• Among sectoral indices, Nifty Media was the top performing index increasing sharply by 5.5% from previous week’s close. The gains were visible across the sectors with Nifty Oil and Gas, Nifty PSU bank showing significant gains. On the contrary, Nifty IT witnessed a marginal decline of ~0.4%.

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• Globally, we saw US markets witnessed strong gains with Dow Jones increasing by ~3%, and S&P 500 increasing by 1.3%. The gains were supported with strong US GDP growth rates of 2.8% q/q for Q3 2024. European markets initially saw some gains led by Tech but eventually the gains faded with Euro Stoxx 50 declining by 0.4%. Asian markets continued the mixed picture. Japan’s Nikkei index saw a fall of ~0.2% led by concerns over inflation. Hang Sang index inched higher by almost 1%.

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• Bond yields fell during the week following the weaker-than-expected domestic GDP growth data for the second quarter of FY25, which may pave the way for an earlier rate cut by the RBI. Gains were extended following an ease in U.S.

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• Yield on the 10-year benchmark paper (6.79% GS 2034) fell by 11 bps to close at 6.74% from the previous week’s close of 6.85%.

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• Government data showed that India’s fiscal deficit for the period from Apr to Oct of FY25 stood at Rs. 7.51 lakh crore or 46.5% of the Budget Estimates (BE) of the current fiscal.

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• India’s fiscal deficit was at 45.0% of the BE in the corresponding period of the previous fiscal year. Total expenditure stood at Rs. 24.7 lakh crore or 51.3% of the BE as compared to 53.2% of the BE in the corresponding period of the previous fiscal year.

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• Government data showed that Gross Domestic Product (GDP) of the Indian economy at constant (2011-12) prices witnessed a growth of 5.4% YoY in the second quarter of FY25. In the Jul-Sep quarter of last year, the GDP growth rate was 8.1%.

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• Gold faced a notable correction of over 2.4% last week as geopolitical tensions eased following a ceasefire agreement between Israel and Hezbollah, dampening safe-haven demand. This development, coupled with the Federal Reserve's cautious tone on rate cuts as highlighted in the FOMC minutes, weighed on investor sentiment and led to a pullback from weekly highs.

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• Silver declined by more than 2% last week, marking an 11-week low as the metal's safe-haven allure diminished amid reduced geopolitical risks following the US- and France-brokered ceasefire in the Middle East. Additionally, a tempered outlook for industrial demand, coupled with expectations of a cautious Fed stance on rate cuts, contributed to bearish sentiment.

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Best Regards,

Alpha Research Team

Disclaimer

The above views are our expectations of the economy, market and investments. The views may or may not play out accordingly. You are requested to do your own due diligence before making any investment