Geojit Financial Services Ltd

💼There are two distinct trends in the market now which can be observed in the secondary and primary markets. 💼In the secondary market, recently, there is a positive trend with high quality stocks being accumulated and moving up. 💼Bajaj Finance, ITC, Bajaj Auto and Maruti are examples of this healthy trend. At the same time there is froth in segments of mid and small caps where valuations are hard to justify. 💼The other trend is the totally irrational moves in the SME IPO market where many SMEs of doubtful credentials are getting their IPOs oversubscribed many times and the stocks on listing are manipulated and driven to upper circuits for days. 💼Due deligence is conspicuous by its absence. Many retail investors, driven by greed, are rushing into this gambling game. This will end in tears for the newbies who have no understanding of market fundamentals. 💼The record-breaking winning streak of the Nifty is likely to end soon, and the market needs to correct. But there are no signals of a major breakdown or triggers for a breakout. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The market has entered a zone of steady but mild up-move caused by accumulation of quality largecaps. 💼FIIs turning buyers last week mainly due to some large bulk deals also has improved sentiments in the market. 💼If the market closes positive today that will be a record for the Indian stock market with the Nifty posting record 13-day winning streak. Sentiment-wise this is positive. 💼Sectoral churns are happening faster now than earlier. IT has come back on hopes of increased tech spending in the US which the expected soft landing of the US economy is likely to facilitate. 💼Pharma stocks are witnessing accumulation on improving business prospects. Profit booking is happening in segments like railways and defence triggered by valuation concern. 💼FY 25 Q1 GDP print at 6.7% indicate mild sluggishness in the economy. This will warrant rate cuts by the RBI in the next monetary policy meet. 💼Even though banks are struggling for deposits, rate cuts will improve the prospects for banking stocks. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Weak global cues and the consequent weak openings have proved to be opportunities to buy in the domestic market. 💼This pattern may persist. A significant feature of the near-term market trend is that it is resilient and steadily moving up without sharp spurts thereby preventing a spike in valuations in the largecap category. 💼The recent accumulation of IT stocks stems from the confidence that the soft landing scenario in the US economy will lead to execution of the orders on which the IT companies have been sitting for some time now. 💼SEBI’s advisory to investors to be vigilant in investment in SME stocks is timely. Investors should heed the warning from the regulator that many SMEs are “projecting an unrealistic picture of their operations.” 💼The largecap segment is safe without euphoria. But the SME segment is certainly in risky euphoric territory. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The market has entered a consolidation phase with low volatility and this trend is likely to continue in the near-term. 💼Falling bond yields in the US has restrained FII selling, and they have even turned marginal buyers. Going by previous trends, DIIs are likely to sell if FIIs continue to buy. 💼This trend will keep the market within a range with a slight upward bias. This is a desirable and healthy trend, given the elevated valuations in the market. 💼A bull market is prone to excesses. Retail investors chasing many mid and smallcaps without any concern for valuations and hyper speculative activity in the F&O and intra-day segments are instances of some of these excesses. 💼Another major excess, which is becoming an area of serious concern, is the irrational and hyper speculative activity in the SME segment. 💼IPOs of some SMEs without any track record and suspect financials are getting oversubscribed many times. 💼Retail investors chasing such IPOs on hopes of getting listing gains has become an unhealthy trend. Irrational frenzies like these often end in tears for investors. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼There are both headwinds and tailwinds for the market now. 💼Headwinds are coming from the escalation of the geopolitical tensions in the Middle East and Ukraine. 💼Brent crude has shot up above $ 81. The strongest tail wind comes from the expected rate cuts by the Fed which will spill over to other central banks including the RBI. 💼Indian economy now needs monetary stimulus through rate cuts and this is likely in the next policy meet. 💼If geopolitical tensions cause dips in the market, DIIs and retail investors are likely to buy that dip. 💼Financials, particularly banking and other rate sensitives like housing and automobiles are the likely preferred sectors for institutional buying. 💼Investors can use weakness in the market to buy leading banking stocks and other rate sensitives in these segments. Segments like paints, adhesives and tyres which use crude as inputs will turn weak. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The Fed chief Powell’s clear message of the beginning of the rate cutting cycle will impart further resilience to the ongoing global rally in stock markets. 💼Deviating from his usual cautious messaging, this time Powell unambiguously stated that “the time has come for policy to adjust” and that “the direction of travel is clear.” 💼This will act as sort of a “Powell put” similar to the famous “Greenspan put” that supported US equity markets during the Greesnspan era. 💼Form the Indian market perspective, this is significant since it will strengthen the minority view espoused by the two independent members of the MPC in favour of rate cuts in the last monetary policy meet. 💼Since core inflation in India is only 3% and economic growth is turning slightly sluggish, the MPC is likely to cut rates by 25 bp in the next meeting, The consequent rise in bond prices will be positive for banks, which present good buying opportunity, since valuations are fair. 💼On the flip side, worsening of the Israel-Hezbollah tensions may have negative impact, if the situation worsens further. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Market is witnessing significant sectoral churning. 💼The PSU stocks rally which gave excellent returns in recent months is losing steam. For PSU banking stocks, the turnaround story which took the PSU banks from losses of Rs 87000 crores in FY 2018 to profits of Rs 1.41 lakh crores in FY 2024 is over. 💼But the valuation of this segment is still attractive. 💼Defence and many railway stocks have good growth prospects but the valuations in most cases had run ahead of fundamentals, warranting a correction which has been happening recently. 💼Money is moving into private sector financials where valuations are fair and attractive in this market which doesn’t have valuation comfort. This churning is fundamentally sound. 💼Globally the market’s focus today will be on Jerome Powell’s comments at Jackson Hole on the economy and the possible rate cut trend. Powell is likely to sound dovish indicating rate cut in September. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Latest US jobs data for the 12 months ending March 2024 shows additional jobs generated lower than estimated earlier. 💼The implication of this significant data is that it makes the path to Fed rate cuts clearer. 💼The most likely scenario now is a Fed turning dovish and starting the rate cut cycle with a 25 bp rate cut in September indicating further cuts to follow. 💼This can keep the markets stable since the room for uncertainty is coming down. 💼The declining trend in the dollar continues with the dollar index at 101.14 facilitating further firming up of gold. 💼This, in turn, is positive for gold jewellery business and gold loan lenders. The valuations of the latter are fair. 💼In institutional activity the trend of sustained buying by DIIs and sustained selling by FIIs continues. But the intensity of FII selling is declining. 💼Retail investors are likely to continue with the buy on dips strategy which has been a consistently successful strategy in this bull market. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼An important trend in the market now is the shift in market preferences from overvalued segments to fairly valued segments. 💼Attractively valued financials are witnessing value buying and overvalued segments like railways and defence- related stocks are witnessing profit booking. 💼This is a healthy trend and is likely to sustain for some more time. Prices cannot soar continuously. Reversion to mean is a normal trend. 💼The trend of FII selling and DII buying continues. But the fall in the dollar index to 101.39 has the potential to arrest the trend of FII outflows. 💼But big FII investment will happen only if Indian valuations correct, which appears unlikely in the present context of sustained domestic inflows. 💼Despite high valuations the undertone of the market continues to be bullish. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets