Geojit Financial Services Ltd

💼The year-end rally which took the Nifty up by around 14 % from the 2023 October lows, is slowly running out of steam. 💼The major challenge for the rally comes from the mother market US which is showing signs of weakness. 💼The concern in the US now is that the market expectation of a rate cut in March may not materialise since the labour market continues to be tight and the unemployment data is lower than expected. 💼Inflation coming under control means that the rate hiking cycle is over and the Fed pivot is imminent. 💼But the market will be disappointed if the rate cut doesn’t happen in March. 💼The sign of this possible trend can be seen in the firming up of the 10-year US bond yield above 4%. 💼The exuberance of retail investors may be a positive factor which might push up the already frothy broader market. 💼But profit booking by DIIs and seasonally weak January can impact the rally. 💼Long-term investors can use dips in the market to buy high quality banking stocks which are fairly priced. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼An important feature of the ongoing rally in the market is that retail investors, not institutions, are calling the shots. 💼This retail exuberance is getting reflected in the records being set by the Mid and Smallcap indices even at frothy valuations in these segments. 💼The excessive valuations of the broader market cannot continue for long. 💼Big corrections are likely in the broader market; the only question is when. 💼The risk to the global rally can come from the Fed which may turn out to be less dovish than the market expectation. 💼Latest data from the US indicate an economy which is not weakening as much as the Fed would like. So watch out for the Fedspeak. 💼The Q3 results will impact stock prices. IT stocks have corrected anticipating poor numbers. 💼The result to watch would be that of HDFC Bank which has the potential to move the Bank index. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼A predictable market trend is that high valuations will lead to corrections. 💼The unpredictable part is the timing and the trigger for the correction. 💼In the last few days, globally markets are correcting and the trigger for the correction is profit booking, which is normal and rational. 💼Markets have a tendency to overreact. Perhaps the sharp rise in the US market in response to the Fed pivot was a bit overdone. 💼The marginal rise in the US bond yield is a reflection of the market concern regarding the timing of the expected Fed rate cut. 💼A good strategy now would be to move some money from the overpriced mid and small caps to the fairly- priced high quality large caps like the leading banking names. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼Market has turned highly volatile with profit booking triggered by high valuations. 💼Even DIIs who have been consistent buyers are booking profits. Buying on dips also is happening simultaneously. 💼This twin moves of profit booking and dip buying will keep the market highly volatile in the near-term. 💼An important trend in the market is the renewed buying in pharmaceuticals. 💼Further buying can be expected in this segment. 💼The Supreme Court judgement on the Adani- Hindenberg issue expected this morning will have a sentimental impact on the Adani stocks in particular and the overall market in general. 💼Long-term investors can buy the fairly-valued largecap private banking stocks which have the potential to outperform the Nifty this year. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼The 1000 point rally in the Nifty in the last one month has imparted momentum to the market. 💼Retail investors encouraged by the excellent returns of 2023 have turned exuberant and are chasing stocks, unmindful of the high valuations, particularly in the mid and small cap segments. 💼Investors should not fall into the trap of ‘recency bias’ and chase low grade stocks in the broader market. 💼Declining dollar and US bond yields provide a favourable global context for equities. 💼FII inflows in 2024 are likely to be huge and has the potential to lift high quality large-caps, particularly in segments like banking where valuations are fair. 💼An important trend to watch is the spike the volatility index VIX to 14.5 which indicates that high volatility is round the corner. 💼Yesterday’s sell off in the last 30 minutes is a warning that at higher levels there can be bouts of big selling. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼As the New Year begins it is a Goldilocks scenario for the economy and markets. 💼The growth momentum in the economy is strong. 7% GDP growth in FY 24 is likely to be followed by around 6.7% growth in FY25 with decent corporate earnings growth. 💼The banking system is in the pink of health and all macroeconomic indicators are stable. 💼Political stability after the General elections looks almost certain. 💼From the global perspective, the US economy appears to be heading for soft landing. 💼The US 10-year bond yield at 3.87 % and the dollar index at 100.6 are tailwinds for the market. 💼FPI inflows in 2024 are likely to be robust. 💼The concern, however, is that most of these good news is in the price; valuations are a bit stretched and above the long-term averages. 💼So, the market is vulnerable to corrections from presently unknown risks. 💼The broader market is overvalued; safety is in large-caps. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #marketupdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #marketupdate

💼As 2023 draws to a close, the most significant feature of the year’s rally is the sharp outperformance of the broader market. 💼The midcap index is up by almost 45 % and the small cap index is up by 55 % leaving the Niffy far behind with appreciation of around 20%. 💼This trend is likely to be reversed in 2024 since the mid and small caps are overvalued and large caps are relatively fairly valued. 💼Autos, construction and financials are set to do well in 2024. 💼Autos are in a cyclical rebound, financials are fairly valued even after the recent run up and the prospects for construction related segments continue to look good. 💼Capital goods will continue to do well in 2024 too. 💼January is normally a poor month for the market. 💼Q3 results and management commentary will be keenly watched by the market. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼The rally looks set to continue supported by the leading banks which are witnessing institutional accumulation. 💼Strong cues from the mother market US, steadily declining US bond yields and the dollar index below 101 augur well for the continuation of the rally. 💼It is important to note that high quality large caps have taken the leadership in this rally which has taken the Sensex above 72k. 💼A significant market indicator is the volatility index VIX rising above 15. 💼Investors should take this as an indication of high volatility ahead. 💼Remaining invested is important in a bull market. But chasing the market at high valuations would be highly risky. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼The resilience of the market even in the holiday season, which is normally devoid of much action, is an indication of its underlying bullishness. 💼The global support to the market from the mother market US where the S&P 500 is close to all-time high is significant. 💼There are areas of concern which investors have to be careful about. 💼Several IPOs getting heavily oversubscribed is an indication of exuberance. 💼There is frenzy in the mid and small cap segments where valuations are excessive. 💼The rally in the PSU space, in some segments like ship building, are being driven by hope based on order inflows. 💼The market is ignoring the execution challenges here. 💼Investors should give priority to high quality bluechips which are doing well and have good earnings visibility. 💼A correction is the broader market is inevitable. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate