The Indian stock market is bracing for a week of volatility, with several key factors expected to shape the market outlook. These include the US Presidential Election results, the US Fed Interest Rate Decision, activities of Foreign Institutional Investors (FIIs), and major macro-economic data such as Indian and US PMI data. These insights come from experts who have been closely monitoring market trends and dynamics.

Last week, the markets closed with a modest gain, driven by a strong performance by Public Sector Undertaking (PSU) banks in the second quarter and a slump in oil prices. This was in anticipation of an ease in retaliations in the Middle East, which significantly boosted investor sentiment. The Nifty was up by 123 points or 0.51 per cent at 24,304, and the Sensex was at 79,724, up by 321 points or 0.41 per cent.

Sectoral rotation was evident during this period, with the previously strongest IT index falling by about 4 per cent, while the lagging Bank Nifty index gained roughly 1.75 per cent. The rise in the stock market last week was attributed to the good results presented by companies like ICICI Bank, Federal Bank and L&T. Additionally, the market received support from strong domestic economic data.

Fiscal Deficit and FII Activities

India's fiscal deficit in the April-September period of the current financial year stood at Rs 4.75 lakh crore, which is 29.4 per cent of the target for the financial year 2024-25. Last year, this figure was Rs 7.02 lakh crore. This indicates a significant improvement in the country's fiscal health, which is a positive sign for the economy.

However, FIIs continued their selling spree, offloading around Rs 14,000 crore last week. This marked October as a record month for FIIs' outflows in the secondary market, totalling Rs 1.2 lakh crore. Despite this, Domestic Institutional Investors (DIIs) countered this selling pressure by purchasing approximately Rs 1.07 lakh crore.

Santosh Meena, Head of Research at Swastika Investmart, commented on the current market situation. He said, Nifty is struggling to hold above the 24,500 level, with immediate support at the 24,000-23,900 range. A breach below this could lead to a test of the 200-DMA at around 23,500. Above 24,500, resistance looms at the 24,650 clusters of the 200 and 100-DMAs, which could trigger a short-covering rally if surpassed.

Market Predictions and Stock Recommendations

Palka Arora Chopra, Director of Master Capital Services, also shared her insights. She said that Bank Nifty displayed strength this week, closing with a 1.75 per cent gain and finding support near the 51,000 level. A breakdown below this support could increase selling pressure, potentially pulling the index down toward 50,500. On the upside, buying interest is likely to emerge only above the 51800 level, which may take the index towards 52,300 levels. Until then, the market may remain range-bound between 51,000 and 52,300.

In other news, Choice Broking's executive director, Sumeet Bagadia, recommended buying two stocks on Monday, November 4th, after October ended with a difficult month for bulls, wiping out gains from the previous two months, with the Nifty falling more than 6%, one of the biggest monthly declines in the recent past. He recommended buying TATAPOWER in Cash @ Rs 445.45, with a stop-loss @ Rs 430, and a Target @ Rs 477.

Domestic equity benchmarks Sensex and Nifty 50 snapped a four-month winning streak in October and logged their worst monthly performance since the COVID-induced lockdown in March 2020, hurt by record-high monthly foreign outflows and lacklustre corporate earnings. The MSCI India index snapped a record 11-month winning streak, while mid-caps briefly entered correction territory.

In conclusion, the Indian stock market is expected to witness significant volatility in the coming week, with several key factors likely to influence market trends. Investors are advised to stay cautious and make informed decisions based on the latest market data and expert opinions. The market's performance in the coming week will provide further insights into the impact of these factors on the Indian stock market.