Indian stock market prediction for November 2019 Series
Indian stock market ended on a positive note in the October series. The market reacted to the positive happenings in the last month. Though the domestic macro data was not much supportive but global cues helped the Indian stock market to close in a positive zone.
Indian stock market October highlights
The benchmark indices Nifty50 future touched high at 11,985 on the expiry day 31st Oct on an intraday basis and low of 11162.50 on 9th October in the last series. The Nifty50 future gained 271 points or 2.25% in the October series.
The Bank Nifty future opened at 30197.90 in October series, touched high at 30475 on the expiry day and low at 27780 on 7th October. The Bank Nifty future just closed flat in the October series, it has gained only 102 points.
The top gainers in Nifty50 Stocks in October series are Yes Bank followed by Tata Motors, Zee Ent, Eicher Motors and SBI. The top losers in October series are Bharti Infratel, Infosys, Kotak Mahindra Bank, and IOCL
Among the Sectors, IT, Oil & GAS, Insurance, FMCG, Chemicals, and Footwears were ended in a positive zone. Whereas Metal, Telecom, Media, Auto, Capital Goods, Banks ended in red in the last series. FIIs and DIIs were net buyers in the cash segment in the October series.
Indian stock market News in October
In the first week of October series, the IRCTC IPO made a strong debut. It listed 25% higher on the first day and is currently trading at three times of IPO price. The government proposed a stake sale in five PSU’s. Adani is one of the strong contenders to buy the government’s stake in CONCOR. Later Saudi Aramco has shown interest in buying the government’s stake in BPCL’s stake.
Economic Offence Wing (EOW) has registered an FIR against the Directors of Lakshmi Vilas Bank (LVB) and the share price of LVB reacted negatively on the news. A PIL was filed against Indiabulls Housing Finance, Delhi High Court issued notice against the company.
In the second week of October series RBI had initiated Prompt Corrective Action against the LVB. This is due to insufficient funds to manage risk, huge bad loans, and negative returns on assets for two years. The PIL of Indiabulls and PCA of LVB has concerned the investor of their merger which was later rejected by the RBI.
The September Auto sales numbers announced in October were negative, except Atul Auto. The shares of Yes Bank fell drastically after Rana Kapoor sold almost all his stake but it has bounced back after the CEO Ravneet Gill announced for fundraising plan.
The World Bank had reduced the Asia Specific growth from 6.3 in 2018 to 5.8 in 2019 due to the uncertainty of US-China trade talks. The 1.1% YoY IIP numbers came in October and were much below the street expectation.
Infosys plunged almost 20% in two trading sessions after whistleblower complaints unethical practices by the company’s executives to boost its profit and revenue.
News that creates positive sentiments in the Indian Stock Market
Indian stock market was trading negatively on the first half of the October series. The positive global news and absent of negative news from the domestic side made positive sentiments in the market in the second half of the series.
RBI cut the repo rate for the fifth consecutive time in a row by 25 bps to 5.15%. It has also revised the GDP growth from 6.9 to 6.1 for FY19-20.
Reliance Jio has announced to charge 6 paise IUC charges, other telecom companies will also follow the same. The government had constituted a panel to work out a bailout package for the telecom sector. These are positive news of telecom sectors, the share price of telecom companies jumped on that news.
Indiabulls ventures announced a buyback of its shares at Rs 150 per share. Bandhan Bank touched 52 weeks high after the news of getting added in the MSCI Index in October series.
RBI granted to merge district co-operative banks to set up Kerala Bank. The Dearness Allowance increased by 5% to all government employees and pensioners in the month of October had cheered the market.
Later, there was a positive development in the US-China trade talks and Brexit deal in October. The Indian market had bounced on that day when the news flashed that China had confirmed signing the Phase One of the trade deal.
Sensex hit a record high on Wednesday, a day ahead of expiry.
On the last day of the October series market was up mainly due to FED’s rate cut and the Bank of Japan kept monetary policy unchanged.
Indian Stock Market events in November Series
The November series has started with a positive note. The first day of the November series started with Auto sales figures.
Auto Sales:
Most of the Auto companies posted their sales figures for the month of October was negative. Maruti Suzuki reported a 4.5% growth in domestic sales after seven months. M&M and Toyota reported improved performance in the month of October. The last month’s domestic sales of Auto has got improved due to the festive season.
Few more auto companies have reported that they had managed to arrest the decline of auto sales numbers in October. It would be interesting to see the auto sales number in Dec to know whether the trend has actually turned positive or not.
FIIs inflow
FIIs inflow for the month of October series was positive, hope the trend will continue in November also. On the first day of the series, FIIs were net buyers in the cash segment.
Thanks to the Finance Minister to roll back the FPIs tax and to reduce corporate tax, which had actually motivated FIIs/FPI to come back again. Further liquidity from the FII/FPI can improve the sentiments of the Indian stock market outlook in the November series.
The US-China Trade talks & Brexit
The US-China Trade deal and Brexit are two important issues that can create the global market unstable. In the last month, we have seen positive development in both the matter.
Leaders of both the countries’ US and China are optimistic about reaching a deal. China had confirmed signing the phase one trade deal which consists of 60% of the total trade deal. Now the new location will be announced most probably in mid-November for actual signing the deal.
In the case of Brexit, it has been delayed and most will take place after two months. So we need to focus on the development of the US-China trade deal to get the global cues for our Indian stock market.
Q2 Earnings
Many large-cap companies posted their Q2 earnings in the month of October and most of them beat the street estimates. We hope the momentum to continue this month also. The Nifty50 stocks that are going to post their earnings in November are HDFC, Titan, Tata Steel, UPL, Cipla, Sun Pharma, Power Grid, M&M, Britannia, Coal India, Adani Ports followed by 1000 plus mid and small-cap stocks.
Macro Data
In the last month, macro data was not supportive and it became a hindrance for the Indian stock market to move higher. The government has taken many steps and done reforms to revive the economy in the last few months. As per the economic cycle, it will take a minimum of 10-12 months’ time to get any result in the macro data front.
We should follow the below important macro data which are scheduled in the month of November.
5th Nov -PMI Service data,
11th Nov- IIP data
12th Nov- Inflation retail CPI data
14th Nov- WPI data
Technical Levels of Nifty50 and Bank Nifty future
Technical levels for Nifty and Bank Nifty
Primary Trend Nifty Future( As on 02/11/2019): Up
The Range-Bound Trend of Nifty Future in November Series: 11650 – 12200
Primary Trend of Bank Nifty Future (As on 02/11/2019): Up
The Range-Bound Trend of Bank Nifty Future in November Series: 28000 – 32900
Conclusions:
The October series closed positively, hope the trend will continue in the November series also. Globally market is supportive and in the domestic front, there is no big event at present that can trigger the market.
Last week there was news of scrapping dividend distribution tax (DAT), securities transaction tax (STT) and long term capital gain tax (LTCG) on shares. This can boost the sentiment of the capital market and increase market volume.
On the other hand, these could result in a revenue loss of around Rs 80,000 crore. So it would be interesting to see how the Finance minister tweaks all taxes and make equity investors happy.
This can be the next trigger for the Indian stock market and because of that Nifty and Bank Nifty can touch an all-time high. You can also follow our daily market updates and Nifty and Bank Nifty technical levels
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