Geojit Financial Services Ltd

💼The two-day rally in the market is unlikely to sustain beyond a point since earnings concerns are major headwinds. 💼The impact of short covering and the positive sentimental effect of the Maharashtra election results will be temporary. 💼Too much should not be read into the FIIs turning big buyers yesterday since that was due to MSCI rebalancing with higher weightage to HDFC Bank. 💼Leading banks will remain resilient due to consistent buying and reasonable valuations. 💼In the coming days attention will be focused on what President Trump will do. 💼Trump’s selection of Scott Bessent as the Treasury Secretary is a positive from the market perspective since he is regarded as a fiscal conservative. 💼This can help bring down the bond yields in US thereby favouring EMs. But as of now, the dollar index above 107 is a headwind. 💼A sustained rally in the market can happen only when indicators of earnings revival emerge. This is sometime away. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The ability of the market to surprise was evident in the 557 point spurt in the Nifty on Friday. 💼This sharp upswing will continue today assisted by the super NDA performance in Maharashtra. 💼The political message from this election is huge and highly positive from the market perspective. 💼A significant feature of the Friday rally was the sharp spurts in many largecaps with some stocks shooting up by more than 4%. 💼This clearly indicates short covering, which will keep the market resilient today. 💼Whether the rally will continue beyond a couple of days remains to be seen since the earnings headwinds will continue to constrain the bulls. 💼Banking and IT are on strong wicket assisted by fair valuations and reasonable growth prospects. 💼Watch out for capital goods, telecom and pharma stocks. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼There are some important takeaways from the market trends in the present context. 💼The Russia-Ukraine war has escalated with Russia firing even Inter Continental Ballistic Missiles. 💼The relentless selling by FIIs continues with the selling spree reaching a record continuous 37 days. 💼But the market has corrected only by about 11% from the September peak. 💼This is a correction, not a crash. The mother market US is bullish with 25.43% return YTD. These factors suggest that the undertone of this market is positive. 💼The market can recover from the present levels since yesterday’s selling was largely due to the fall out of the Adani issue. 💼But considering the headwinds the market is facing, a sustained recovery is unlikely. 💼The strength in the broader market should not be confused with the fundamental strength of the segment. 💼The strength of the broader market, particularly the midcaps, is due to liquidity and not fundamentals. 💼Fundamental strength and safety are in large-caps. Banking and IT are fairly valued. FMCG, metals and Oil& Gas are weak. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The escalation of tensions in the Ukraine-Russia war can weigh on markets. 💼The element of uncertainty caused by the escalations is high and therefore most market participants are likely to be in a wait and watch mode. 💼However, any sharp slide in the market appears unlikely since the mother market US has largely downplayed the escalation. 💼Sectors to watch are hotels, aviation, banking, telecom, IT and pharma which are doing well. 💼FMCG, cement, petroleum refining and metals are weak. 💼Mutual fund schemes in Banking are ideal for investment now. 💼Systematic Transfer Plans (STPs) can be done in this and largecap category. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼An important takeaway from the recent market trend is that a quick and sharp recovery is not in sight. 💼The momentum that drove the market to its record peak of 26216 in September is gone. 💼There can be recoveries which are unlikely to sustain given the selling mode of the FIIs and the concerns surrounding the weak earnings growth feared in FY25. 💼At best the market may consolidate around the present levels with sideways movements. 💼Sustained up move will emerge only when incoming data indicates earnings recovery. 💼A significant trend is the sustained weakness emerging in large number of mid and smallcaps. 💼Hundreds of such stocks, which had run ahead of fundamentals, and driven by momentum are reverting to mean. 💼Investors need not rush in to grab these stocks which have more downside potential. 💼In contrast quality largecaps are resilient and investors can stick to them. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Even though Nifty has corrected 10.4% from the peak there are no signs of a sustained recovery in the market. 💼Relentless FII selling, earnings downgrades for majority of stocks for FY25, and the consequences of the Trump trade are weighing on the market. 💼Sentiments have turned negative and, therefore, investors should exercise caution at this stage and wait for clarity on the direction of the market. 💼With the dollar index strong at 106.6 and the 10-year US bond yield at 4.44% there is no room for a quick reversal of FII flows. 💼Investors can focus on areas of strength like digital companies and high quality banking stocks. 💼Largecaps like RIL and Eicher are showing resilience. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼During a correction phase in the market, like the present one, there will always be counter moves, which will facilitate a bounce back. This can happen any time now. 💼The huge liquidity at the disposal of the DIIs can trigger this bounce back. 💼But such a bounce back is unlikely to sustain since the fundamental factors are unfavourable. 💼The Trump factor has triggered many profound changes in markets already. 💼The dollar index is strong and rising and is currently at 106.61. The US 10-year bond yield is at 4.48%. 💼These two are strong headwinds for equity markets in emerging economies like India. 💼The positive factor is the huge liquidity at the disposal of the DIIs and the sustained flows into these funds. 💼Domestically, the worry is the disappointing Q2 results and the consensus earnings downgrade. 💼How long can these flows sustain ? How early can we expect rebound in earnings growth and strong GDP indications. 💼These are relevant questions for which we will have to wait for answers. Meanwhile investors will have to stay with quality stocks in sectors with strong demand. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼A significant feature of this year’s market movements is the big variation across countries and regions. 💼The US is, by far, the best performing market with 26.17% YTD returns in S&P 500. 💼India is now underperforming with only 9.85% YTD returns in Nifty. The Euro Zone index Stoxx 50 has given only 5.14% YTD retuns. 💼The performance of the economy and expectations around earnings growth are the main factors behind this variation in performance. 💼US economy continues to be resilient, India is facing growth concerns and the Euro Zone is very weak. 💼The Trump victory has added an element of high volatility to markets. 💼From the emerging market perspective, the rise in the dollar index and the sharp spike in the US 10-year bond yield to 4.42% are causes of concern. 💼Such high yields in US bonds will facilitate more outflows from emerging markets to US. 💼This will continue to be a headwind for India. Investors should be cautious in investing in sectors like cement, metals and petroleum refining which are facing growth slowdown. 💼Safety is sectors like banking, new age digital companies, hotels, pharma and IT where growth prospects are good. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Two strong factors have been at play in this consolidating market. 💼One, the relentless selling by FIIs has been favouring the bears and pulling the market down. 💼Two, the sustained buying by DIIs has been supporting the market preventing a crash in the market. 💼How the market will trend in the coming days will depend on the relative strength of these two factors. 💼In this context, it is important to note that the intensity of FII selling is coming down ( yesterday FII selling was Rs 2026 crores) and the inflows into mutual funds is steadily increasing which will enable DIIs to continue buying. 💼Monthly flows into equity mutual funds have touched an all-time high of Rs 41887 crores in October clocking a 22% month-on-month increase. 💼This can provide resilience to the market and fundamentally strong fairly valued stocks like the leading banking names will outperform. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets