Nifty outlook: Will November be naughty or nice for Nifty? It’s a 50-50 chance, shows 10-year data

Nifty’s historical track record of the last 10 years shows that the index gave positive returns five times in November with the pandemic-hit 2020 turning out to be the best one with an 11.4% monthly return.

The worst one was in 2016 when the index eroded 4.65% of investor wealth.

In the calendar year 2022, the stock market has given positive returns in only four months amid heavy sell-off by foreign institutional investors or FIIs.

July’s 8.6% return has been the best one so far which came right after Nifty hit a 52-week low of 15,183.40 on June 17.

As the US Fed looks set for yet another 75 basis point rate hike on November 2, analysts say the pace of FII outflow would be a key determinant of the market’s trajectory.

Having sold Indian stocks worth over Rs 1.7 lakh crore so far in the calendar year, the outflow by FIIs reduced in October.

Since 2012, FIIs have been net sellers in November only three times in 2015, 2016 and 2021, shows ACE Equity data. Mutual funds, on the other hand, are more prone to selling in November as seen on five occasions in the last 10 years.

Analysts say we might be in the last phase of the FII sell-off. “Maybe the worst for the market is over because inflation may have peaked and FIIs have sold a lot. However, we will continue to hover with a negative bias in the next one to two quarters,” said Vinod Nair, Head of Research at

.

F&O data shows the November series has begun on a positive note with both FIIs and HNIs rolling over long positions.

“Going into the November series, we will be bullish and assign a higher probability of a breakout on the upside after a long spell of consolidation. Hence, we will be a buyer in dips here,” brokerage

said in a report.
Securities has told traders to use any running correction towards 17,300-17,500 levels to accumulate long positions with the stop loss of 17,000 levels. “On the higher side, the 17,900-18,100 level would act as immediate resistance. A move above 18,100 could trigger short covering with fresh long build-up which could take the Nifty towards all-time high levels of 18,600 levels,” it said.

(With data inputs from Ritesh Presswala)


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)