Nifty 50: Upbeat Inflation News Drives Nifty Higher

Stock Market This Week

Both the major benchmark indices were higher this week. Sensex gained 0.53%, while NIFTY was up 0.49%. The inflation data was the key highlight for the week. Let us look at how the market turned out for investors this week.

Nifty 50 Movement This Week

The Indian equity market started the week on a weak note on Monday as Moody's Investor Service downgraded 4 Adani stocks to Negative. Investors also looked forward to domestic retail inflation data due later in the week. All the major indices ended in the red - FMCG closed flat.

On Tuesday, the Indian equity market ended higher tracking gains in global equities. Retail inflation breached RBI's upper tolerance limit and touched 6.52% in January. Information Technology was the biggest gainer, while Realty remained under pressure and was down more than 1.5%.

The Indian benchmark indices continued the winning rally on Wednesday following strong global cues and soft WPI numbers. The small and midcap space was under pressure as corporate results from small and midcap companies were mostly muted. Investors looked closely at the last leg of the result season.

On Thursday, the benchmark indices traded in the green for the most trading session but lost all the gains in the final hour to close flat with marginal gains. The rally in the first half was led by metal and IT stocks. The selling pressure was seen in Bank, Finance, and Auto indices.

The Indian equity market ended lower on Friday, tracking Wall Street after a fresh slate of US economic data underscored bets that the Fed would keep interest rates higher for longer. Most major indices ended in the red with IT, Bank, and Pharma shedding the most. 

Key highlights for the week:

Quarterly results: In the last leg of quarterly results, a few big companies reported their earnings. Tata Steel reported a surprise loss for the December quarter. The new-age company, Nykaa, reported a significant drop in its net profit, but the revenue was up 33% YoY. IRCTC reported exceptional growth numbers in both the topline and bottomline. ONGC also reported good growth numbers and a second interim dividend for investors. Eicher Motors' revenue jumped 29%, and the net profit was up 62% YoY.

January inflation: India's retail inflation for January increased to 6.52% in January as against 5.72% in December 2022. Meanwhile, rural inflation stood at 6.85%, whereas urban inflation came in at 6%. The January core inflation came in at 6.1%, the same as last month. The Street had pegged it at 6% for January 2023. Food inflation came in at 5.94%, as against 4.19% in December 2022. 

Gold Import January: Gold imports declined 76% to 11 tonnes (YoY) in January, hitting a 32-month low. In January last year, 45 tonnes of gold were imported. In 2022, the demand for gold was at an 11-year high. Physical demand decreased at record prices. Lower imports could weigh on benchmark gold prices, but the fall may help in bringing down India's trade deficit and support the ailing rupee.

MSCI review: According to a report, three Adani Group companies - Adani Power, Adani Total Gas, and Adani Transmission – are expected to be removed from the MSCI India index during the rebalancing exercise in May following a sharp correction in their stock prices. MSCI has said that it will postpone the implementation of updates to weightings for two of the Adani Group firms, Adani Total Gas and Adani Transmission, to the May benchmark review.

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This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.