Sensex, Nifty Rise 2% This Week; Is Stock Market Open On Maharashtra Election Results, And Their Impact Ahead?

Sensex, Nifty: After a bearish eight days, the Indian stock market recovered massive losses on Friday, November 22, 2024, with Sensex surging by around 2,000 points or 2.5% and Nifty rising by over 550 points or 2.4%. The weekly performance turned green eventually for these two benchmarks, which was earlier dragged by the escalation of war between Russia and Ukraine coupled with investors' demand for dollar and treasury yields. On November 23, Maharashtra, the headquarters state of BSE and NSE, is going to know the outcomes of the general assembly elections. Is the stock market open?

Stock Market Weekend Holiday:

Trading on BSE, NSE and other market-related instruments in India is closed on the Maharashtra election results day. One of the major reasons is that November 23 falls on Saturday and it is a weekend holiday. The market will also be closed on November 24 due to the Sunday holiday. The trading will resume on November 25th, Monday.

Sensex, Nifty Weekly Performance:

Sensex reclaimed above 79,000 mark to end at 79,117.11, registering gains of 1961.32 points or 2.54% on November 22. While Nifty closed near 24,000 levels, to 23,907.25 higher by 557.35 points or 2.39%. Bank Nifty climbed by more than 762 points or 1.5% to end at 51,135.40. Also, Nifty Financial Services rose by 1.5%. Meanwhile, Nifty Next 50 skyrocketed by a whopping 1,251.40 points or 1.9% to finish at 68,016.85. Midcap and Smallcaps also surged by about 1% each.

According to Dr. Joseph Thomas, Head of Research, Emkay Wealth Management, the benchmark indexes surged more than 2 % on account of short covering ahead of the weekend on the last trading day of the week. There is little more than just short covering in this massive uptick as some of the major market participants expressed positive views on the market supported by buying in the banking stocks.

Following the latest surge, Sensex ended the trading week of November 18-22 with an upside of 1,279.37 points or 1.64%, and Nifty soared by 436.10 points or 1.9% outperforming its peer.

Vinod Nair, Head of Research, at Geojit Financial Services said that the market recouped the current week's losses on Friday with a strong bounce back as investors used the bargain opportunity to accumulate beaten-down stocks.

However, FPIs continued to be net sellers in November month, with an outflow of Rs 26,533 crore in Indian equities so far,

Meanwhile, the Indian rupee stayed near its record low of 84.4 against the US dollar. As per Trading Economics, the rupee has refrained from extending its plunge from earlier in the month amid the hawkish outlook for the Reserve Bank of India. Domestic inflation surged to 6.2% in October, overshooting the RBI's target band for the first time in over one year, and delaying expectations on the start of the central bank's rate cuts. In turn, the currency pair was supported by a soaring dollar as the outlook of expansionary fiscal policy and tariffs in the US ahead of Trump's commencement drove investors to trim the magnitude of cuts expected by the Fed.

What To Expect Next Week?

Despite this up move, Thomas added, "It remains to be seen to what extent the current momentum is going to be sustained next week. The Russia-Ukraine conflict, the Middle East situation which is still awaiting resolution, local election results in crucial states etc. are all factors that may have some impact on the markets in the coming week."

For November 25th trade, Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services said, on Monday that, market will react to the outcome of State assembly elections in Maharashtra and Jharkhand along with other global triggers including developments in the Russia-Ukraine war. On the overall results front, the 2QFY25 corporate earnings scorecard was weak, but excluding commodities, it showed an in-line earnings growth. Consumption emerged as a weak spot, while select segments of BFSI are experiencing asset-quality stress. Weak government spending (flat in 1HFY25 YoY), along with excess rainfall, also hurt demand.

Khemka added, "As some of these factors self-correct in 2HFY25, we anticipate a recovery in corporate earnings going forward. However in the near term, we expect volatility to continue in the market, driven by triggers including State election outcome, FII activity and global geo-political concerns."

Furthermore, Nair added that investors need more clarity on the trend reversal to conclude that the current bounce back will turn into a Santa Claus rally. Investors shrug off Adani fears and expect state election results to bring more stability to the market. Many of the blue chips are available at below-average valuations, while meaningful corrections in mid- and small cap indices provide opportunity for broad-based momentum. Sectors like realty, FMCG, auto, consumption, banks, and IT gained more than 2%. Favorable US job data and appreciation in dollar to support domestic IT stocks.

Lastly, Nair said, Most of the state elections are now over, and the market may find stability as government spending will improve in the coming months to meet the FY25 capex target. Which in turn supports private spending. Good monsoon, festival and marriage season may color consumption demand. The upcoming economic indicators like PMI data, IIP, and inflation will be keenly watched by investors for a resemblance of a 10 to 12% corporate earnings growth in H2FY25.