The stock markets kicked off November on a healthy note with the benchmark indices rallying more than 1 percent after losing 2.5 percent in the previous week.
The BSE Sensex got back well above the psychological 60,000 mark, rising 1.4 percent to 60,138.46, while the Nifty 50 crossed 17,900 levels, climbing 1.5 percent to 17,929.65.
Here are five key factors that drove stocks on November 1:
1 Global cues
Most indices globally traded higher despite a mixed picture of manufacturing in China in October. France’s CAC, Germany’s DAX and Britain’s FTSE indices were up by 0.4 percent to 0.9 percent at the time of publishing this story.
In Asia, Japan’s Nikkei rallied 2.6 percent and South Korea’s Kospi was up a third of a percent. However, China’s Shanghai Composite index was flat with a negative bias after manufacturing data.
China’s manufacturing Purchasing Managers’ Index (PMI) for October dropped below the 50 mark to 49.2, continuing weakness for the second straight month. It was at 49.6 in September.
2 Auto sales
The BSE Auto index gained 1 percent after most companies reported monthly sales numbers that bettered analyst expectations even though the semiconductor shortage reflected in the numbers. Maruti Suzuki, Bajaj Auto, Ashok Leyland and Tata Motors advanced while Mahindra & Mahindra declined.
Mahindra & Mahindra sold 47,017 tractors and 41,908 auto vehicles in October. A CNBC-TV18 poll had estimated 43,300 units and 31,800 units, respectively. Maruti Suzuki, the country’s largest car maker, sold 1.38 lakh units in October, exceeding CNBC-TV18 poll estimates of 1.18 lakh units.
Tata Motors sold 67,829 vehicles last month, which was higher than the CNBC-TV18 poll estimate of 62,700 units.
3 PMI data, GST collection
India’s manufacturing PMI continued to expand for the fourth consecutive month, rising to 55.9 in October from 53.7 in September, a survey showed. However, employment conditions remained weak.
“India’s manufacturing PMI (seasonally adjusted) stayed in expansion territory for the fourth straight month. The strength in PMI expansion signals improvement in production and new orders, but inflation clearly will be a headwind going forward. We retain our tracking estimate of GDP to grow by 9.9 percent during July-September 2021,” said Rahul Bajoria, chief India economist at Barclays.
Good and services tax collection data also boosted market sentiment. The collection of Rs 1,30,127 crore for October was the second-highest ever and an increase of 24 percent from Rs 1,05,155 crore a year earlier.
4 Buying across sectors
All sectoral indices traded in the green with metal (3.3 percent) and IT (2.3 percent) among the prominent gainers. Bank and pharma indices traded with over 1 percent gains.
The broader markets also gained momentum. The Nifty Midcap 100 and Smallcap 100 indices rose 1.8 percent and 0.9 percent, respectively.
After declining more than 5 percent from record highs and the biggest weekly fall in almost eight months, experts said several beaten-down quality stocks started seeing short covering and value buying as the medium- to long-term story remains strong, though there could be intermittent correction and consolidation, which is always healthy.
Crude oil prices continued to be rangebound after hitting $86 a barrel, trading at around $84 a barrel at the time of publishing.
5 Technical View
The Nifty 50 formed a bullish candle on the daily charts as the current price is higher than the opening price. Experts said if the index decisively crosses the 18,000 hurdle, there could be a further upside.
“Since the market is a bit oversold, we may see some relief move in between, but traders should not get carried away by such rebounds. On the higher side, 18,000-18,100 would now be seen as the immediate hurdles and any bounce-back towards it should be used to lighten up longs,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One, who reiterated staying light and avoiding bottom-fishing for a while.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
