Geojit Financial Services Ltd

💼 Trump’s tariff talks continue to impact markets. 💼 Trump’s declarations yesterday that the US will impose 25% tariffs on automobiles, semiconductors, and pharmaceuticals have impacted India’s pharma stocks since India’s leading pharma companies are major exporters to the US. 💼 If implemented in early April as Trump declared, these tariffs will impact the US as well through shortages and higher prices. 💼 It appears that Trump’s intention is to negotiate and extract concessions before tariffs are imposed. It remains to be seen how this will pan out. 💼 On a positive note, the RBI has indicated a growth recovery in H2 FY25. This bodes well for growth and earnings recovery in FY26. 💼 The market is expected to start responding positively to high-frequency data indicating a recovery. 💼 Additionally, beaten-down midcaps like defence stocks are witnessing some buying. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 Despite largecap valuations turning fair, and even attractive in segments like financials, the market remains weak. 💼 India’s underperformance is striking, especially in the context of new records being set by S&P 500 and Nasdaq. 💼 News of Chinese authorities encouraging their top businessmen to invest is another headwind for India. 💼 Chinese stocks are cheap, with Hang Seng trading at a PE of 12.6, which may attract big inflows from FIIs. This could lead to continued FII selling in India. 💼 FIIs are likely to start buying again when the dollar depreciates and US bond yields decline. This shift in sentiment may take time. 💼 A strong fundamental factor that could turn FIIs into buyers is the indication of earnings recovery in India, likely in early FY 2026. 💼 High-frequency indicators might soon suggest a turnaround in growth and earnings. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 The weakness in the market persists despite the mild recovery witnessed yesterday. 💼 The market construct doesn’t favour a rally. FIIs are likely to continue to sell. News flows are not positive. 💼 The US market continues to be strong and may attract more capital flows from other markets. 💼 A new development from Chinese authorities indicates a revised approach to the relationship between government and business. 💼 President Xi has emphasized the need for a “clean relationship” between government and business. 💼 This is seen as a favorable development for reviving the Chinese economy, which is struggling due to the fallout from the real estate crisis. 💼 If the Chinese government’s new initiatives attract positive responses from FIIs, it could spell more bad news for Indian markets. 💼 More money might flow into Chinese stocks through the Hang Seng exchange, where the PE is around 12 compared to India’s one-year forward PE of 18.5. 💼 Since largecaps in India are fairly valued, calibrated buying in this segment is possible. 💼 However, the current market construct doesn’t favor aggressive buying. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 The Indian stock market is underperforming this year, with Nifty delivering negative 3.4% returns compared to 4.19% in the S&P 500 and 11.7% in Europe. 💼 The broader market has seen even larger cuts—Midcaps are down 9.6% and Smallcaps down 22%—a clear reversion to mean from overvalued levels. 💼 The primary cause of this underperformance is the sharp slowdown in corporate earnings this year, with Q3 results showing only around 7% growth. 💼 Modest single-digit earnings growth doesn’t justify high valuations, leading to relentless FII selling that has hurt the market. 💼 The appreciating dollar further exacerbated the issue. 💼 Only signs of an earnings recovery and a declining dollar can reverse the weakening market trend. 💼 India’s macroeconomic fundamentals are strong, and growth and earnings recovery are on the horizon. 💼 US inflation is likely to rise due to Trump tariffs, prompting a hawkish Fed response, which could pull down US markets and the dollar. 💼 This reversal will eventually happen, but the timing remains uncertain. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 Early indications from the Modi-Trump talks are positive from the market perspective. 💼 The threatened reciprocal tariffs have been delayed, leaving room for further negotiations and a potential deal. 💼 India’s willingness to buy more oil and gas from the US could help reduce the trade deficit. 💼 While Trump is unlikely to back down on reciprocal tariffs, India is being treated as a friendly country, and the bonhomie between the two leaders bodes well for India. 💼 The oversold market may bounce back in the near term, but a sustained rally is unlikely as FIIs continue to sell. 💼 Only a decline in the dollar and US bond yields will turn FIIs into buyers—watch this space. 💼 The ongoing market preference for largecaps over mid and small caps is expected to continue. 💼 Interestingly, some of the top holdings in smallcap mutual funds are now mega caps. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 When the market is in oversold territory, any trigger can ignite a rally. 💼 The Indian market, being highly oversold, is likely to rally on positive news expected from the Trump-Modi talks today. 💼 Some agreement is anticipated between the US and India on reciprocal tariffs. 💼 A positive domestic trigger is the better-than-expected decline in CPI inflation in January to 4.31% from 5.22% in December 2024. 💼 The decline in inflation trajectory justifies the MPC’s rate cut this month and creates a favorable condition for another 25 bp rate cut in April. 💼 This is positive for the stock market in general and rate-sensitive sectors in particular. 💼 However, from the market perspective, the elephant in the room remains the sustained FII selling, which shows no signs of abating. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 Trump’s tariff tantrums have been impacting the markets for the last several days. 💼 Moving from targeting specific countries like Mexico, Canada, and China to imposing import tariffs on steel and aluminum across all countries has heightened concerns. 💼 The European Union’s declaration of retaliatory counter tariffs has increased the probability of a full-blown trade war. How this will pan out remains uncertain. 💼 It is important to understand that even President Trump cannot manipulate the laws of economics. 💼 If higher tariffs raise inflation in the US and the Fed responds hawkishly, the US stock market will crash, restraining Trump—though this may take time. 💼 Meanwhile, the market drama and volatility will continue. 💼 Investors can use the current market weakness to switch from overvalued mid and smallcaps to fairly valued largecaps. 💼 The market is in oversold territory, and a pullback is likely, but with FIIs expected to sell into any rally, the upside is capped. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 A significant trend in the ongoing bearish phase is the outperformance of largecaps over the broader market. 💼 While the Nifty Midcap and Smallcap indices are down 8.6% and 11.3% YTD, the Nifty is down only 1.52%. This outperformance is likely to continue. 💼 Relentless FII selling in largecaps has made their valuations fair, while mid and smallcap valuations remain excessive. 💼 FIIs will eventually turn buyers in India, but that will only happen when the dollar index weakens. 💼 While we know this will happen, the timing remains uncertain. 💼 Investors should focus on quality largecaps in banking, IT, autos, pharma, and capital goods, and wait patiently. 💼 When FIIs return as buyers, they will primarily target the largecaps they are currently selling. 💼 Trump’s latest decision to impose 25% tariffs on steel and aluminum will impact Mexico, Brazil, South Korea, and Vietnam more. 💼 Metal prices are likely to remain soft for an extended period. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 The Delhi election results, particularly the emphatic BJP win, though positive from a market perspective, are unlikely to trigger a sustained rally. 💼 With the dollar index above 108 and the 10-year US bond yield above 4.4%, FIIs will continue to sell the rally, limiting any potential upside. 💼 It is important to understand that valuations in India remain high, especially in the broader market. 💼 The market needs fundamental triggers like indications of GDP growth and an earnings rebound. 💼 Until then, the market is likely to move within a range. 💼 Investors should stick to fairly valued, high-quality largecaps. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets