💼 The trend of strong US macros weakening emerging markets is continuing.
💼 The US 10-year bond yield has spiked to 4.67% on better-than-expected jobs numbers and indications of the services sector doing very well.
💼 This means the Fed may hold rates in January, leading to further strengthening of the dollar and rising bond yields.
💼 The fallout of this on the Indian macros is that the RBI may hold rates in February against the market expectation of a cut.
💼 In this macro setting, FIIs are likely to continue selling, putting pressure on the market.
💼 Large caps, despite fair valuations, may continue to be on the defensive.
💼 Investors can take a slightly long-term view of the market and buy large caps in financials, IT, pharmaceuticals, and select autos. These segments will bounce back in a few months when macros turn positive for India.
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Posted on : 08 Jan 2025 9:29 AM