Stock market ends on a red note amidst fluctuations; RBI governor highlights softening core inflation

Mumbai (Maharashtra) [India], November 23 : The stock market experienced a day of fluctuation, concluding in the red on Thursday.
The Sensex marked a 5.43-point downturn, closing at 66,017.81, while the Nifty followed suit with a 9.85-point decline, settling at 19,802.00. Among Nifty companies, 25 witnessed advances, while 25 faced declines.
Top gainers among Nifty companies included Hero Motocorp, Bajaj Auto, BPCL, IndusInd Bank, and Eicher Motor. Conversely, Cipla, Ultra Cement, SBI Life, LTIMindtree, and LT emerged as the top losers by the end of the trading day.
Varun Aggarwal, founder and managing director, Profit Idea, said, "Markets were moving in a narrow range due to lack of major events in the next few days. US Market are shut on Thursday on account of Thanksgiving Day while the US market will be half day on Friday. On the other hand, domestic markets will be closed on Monday or 27th November 2023. The nifty index opened flattish and after slight strength in the initial hour, it remained flat during the day. Now it has to hold above 19800 zones, for an up move towards 19950 then 20000 zones whereas supports are placed at 19750 then 19650 zones".
Aggarwal added, "RBI Says Softening Core Inflation Shows Monetary Policy Working - India's softening core inflation is an indication that monetary policy actions are working, Reserve Bank of India Governor Shaktikanta Das said. RBI is completely focused on the 4 per cent inflation target, Das said in his speech at FIBAC 2023, an annual banking conference".
The market operated within a narrow range, influenced by the absence of major events in the coming days. The closure of the US market on Thursday due to Thanksgiving Day, along with a half-day on Friday, contributed to the subdued market movement. Meanwhile, domestic markets are slated to be closed on Monday, November 27, 2023.
The Nifty index opened on a flattish note and, after a slight uptick in the initial hours, remained relatively flat throughout the day. To sustain an upward movement, it needs to hold above the 19,800 zones, targeting 19,950 and then 20,000 zones. Support levels are identified at 19,750 and 19,650 zones.
Aggarwal said, "Asian stocks witnessed mixed bag. Japan shares ended higher by 0.3 per cent after the weakening of the yen against the US dollar prompted strong buying of automotive stocks, but gains were capped as the minutes of the Federal Reserve's latest monetary policy meeting showed no signs of rate cuts. Australian and Taiwan Index declined 0.1 per cent and 0.6 per cent respectively. Europe's main equity markets advanced at the open as investors shrugged off a tepid Asian performance before a key budget update in Britain. UK, France and Germany Index marginally decline by 0.2 per cent each".
In related news, Reserve Bank of India (RBI) Governor Shaktikanta Das emphasized that the softening of core inflation in India is a positive indication that monetary policy actions are effective. Speaking at FIBAC 2023, an annual banking conference, Das reiterated RBI's commitment to the 4 per cent inflation target.
Aggarwal stated, "Volatility is expected to continue. Expect India to outperform global markets. We expect a lot of inflows coming in Indian Markets. SIPs have been on the rise every month and a lot of money is available with fund managers to park if a dip comes. Investors should utilise this opportunity for the medium term to accumulate quality mid and small-cap stocks. We expect the IT, Banking, Pharma, FMCG, Petrochemicals, and Metals sectors to do good. Bullish bias risk-defined strategies are best for traders. Expect higher targets to hit on Nifty".
The Asian stock market portrayed a mixed scenario, with Japan shares ending higher by 0.3 per cent, driven by a weakening yen against the US dollar.
However, gains were capped as the Federal Reserve's latest meeting minutes showed no signs of rate cuts. Australia and Taiwan Index witnessed declines of 0.1 per cent and 0.6 per cent, respectively.
In Europe, main equity markets advanced despite a tepid Asian performance. The UK, France, and Germany indices marginally declined by 0.2 per cent each.
Automobile majors were notable performers during the trading day, with Hero Motocorp and Bajaj Auto gaining over 3 per cent each, bolstered by robust sales growth during the festival sessions.
Looking ahead, the market remains positively biased on the Indian economy for the medium term. Short-term support for Nifty lies at 19,276, with major support at 18,837.
The Nifty has shifted into a broader range of 20,000-19,500 levels, with a medium-term target ranging from 20,466 to 21,234.
Expecting volatility to persist, India is anticipated to outperform global markets, with significant inflows expected. SIPs have been consistently rising, and fund managers are well-positioned to invest if a dip occurs.
Investors are advised to leverage this opportunity for the medium term to accumulate quality mid and small-cap stocks. The IT, Banking, Pharma, FMCG, Petrochemicals, and Metals sectors are expected to perform well, with bullish bias risk-defined strategies recommended for traders. Higher targets are anticipated for Nifty.