Geojit Financial Services Ltd

💼 There are many headwinds that will weigh on markets today: the renewed conflict in the Middle East, proposed changes in the India-Mauritius tax treaty and the hotter-than-expected US inflation are negatives. 💼 But partly these negatives are in the price since a retaliation from Iran was expected and the higher US inflation was discounted by the market on Friday. 💼 Signals from the crude market indicate that the Iran-Israel conflict is unlikely to escalate. 💼 President Biden has clearly indicated that he doesn’t support Israeli retaliation. So, the situation may calm down. 💼 However, investors have to be guarded since the element of uncertainty is high during a tense situation like this. 💼 IT stocks will be resilient on the back of better-than-expected numbers from TCS and promising outlook for FY 25. 💼 Banking stocks will exhibit strength since the results will be good and valuations are fair. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 The hotter-than-expected US inflation has spiked the US bond yields. 💼 This is negative for FPI inflows but is unlikely to impact the Indian market which is resilient, and the rally is driven mainly by domestic liquidity. 💼 Dips are likely to get bought imparting strength to the market. Therefore, investors may use the dips to buy high quality largecaps where the margin of safety is high. 💼 From the global equity market perspective sticky US inflation is a negative since it has reduced hopes of three rate cuts by the US. 💼 But it is important to note that there is a real positive factor in the sticky inflation, and that is the exceptionally strong US economy which is showing no signs of a slowdown, leave alone recession. 💼 This resilience of the US economy will support earnings growth and, therefore, the US stock market. This favourable backdrop will be positive for other markets including India. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 Robust economic growth, decent corporate earnings, macroeconomic stability, expectations of political stability after elections, sustained capital flows, and retail investor enthusiasm will keep the market resilient despite rich valuations. 💼 A significant recent healthy trend in the market is the outperformance of the fundamentally strong largecaps over the mid and smallcaps. 💼This trend is making the market healthier and, therefore, has the potential to continue. Largecap banking stocks are likely to be the leaders if the rally sustains. 💼The US CPI data to be published today is significant since that will determine the quantum of rate cuts by the Fed this year. 💼 The fact that US inflation has come down by two thirds is significant and positive from the market perspective, but the trajectory of inflation, going forward, will largely influence the direction of stock markets, globally. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 The pattern of ‘ higher highs and higher lows’ is a distinct bullish signal and this has been the standout pattern in the Indian market this year. 💼 Consequently, buy on dips strategy has consistently worked for investors. The new records set by the market yesterday confirms the bullish market undertone. 💼 A healthy and desirable trend in the market movement yesterday was the outperformance of the largecaps. This trend is likely to continue. 💼 It is important to understand the fact that in this richly valued market there is valuation comfort in largecap banking stocks. 💼 More important, Q4 results of the banking majors are likely to be very good. Sectors like capital goods, autos, cement and hospitality are likely to remain resilient. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 It is important to understand that macroeconomic expectations are changing fast. This year began with market expectations of seven rate cuts by the Fed in 2024. 💼 Then it came down to three and now many believe that the Fed may cut only twice this year. The strength of the US economy and labour market has surprised majority of experts and market participants. 💼Despite the scaling down of rate cut expectations the mother market continues to be buoyant setting new records. This will provide the global support for equity markets like India. 💼The Q4 results season will kick start results of TCS on 12th. For IT companies, results will be tepid and, therefore, market response will depend on the management commentary. 💼Results of financials will be good and this can push up Bank Nifty higher led by banking majors like HDFC Bank, ICICI Bank etc. 💼Small finance banking segment is a category doing well. Capital goods and autos are on strong wicket. FMCG is weak weighed by poor volume growth. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 Some headwinds which have the potential to impact equity markets emerged have emerged. 💼 One is geopolitical: the Iran -Israel skirmishes. The second is the concern that the rate cut expected from the Fed can be lower than three and that the first cut may come only in October. 💼The US jobs data to be released today will throw more light on this. 💼 The Middle East skirmishes have pushed up Brent crude to $ 91 and if oil continues to rise that can pose macro headwinds for India. 💼 It is possible that the exuberant Indian investors DIIs flush with money may ignore the headwinds buy the dips imparting resilience to the market. 💼 Amidst market weakness, banking stocks provide opportunities to buy. Data regarding deposit and loan growth from banking majors, particularly HDFC Bank are positive. 💼Small finance banks data also indicate a healthy trend. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 Global and domestic cues indicate that the market is likely to consolidate in the coming days and start responding to Q4 results as they start coming. 💼 So, Q4 results will be the next major trigger for the market from sectoral and stock-specific perspective. Market expects good results from autos, capital goods, telecom and select pharmaceuticals. 💼 Financials,too, will report good results despite some NIM compression and, therefore, are likely to be favoured by investors. 💼 IT results will be tepid and, therefore, the management commentary will be more important than the results. 💼Even though valuation comfort in banking is in PSU banks, private sector majors are likely to deliver superior returns from a two/year perspective. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 The rising bond yields in US ( the 10-year is at 4.36%) is impacting equity markets. 💼 The rate cut from the Fed expected in July is fading now since the labour market continues to be tight and the rising crude (Brent at $ 89) is feared to add to inflation further constraining the ability of the Fed to cut. 💼 Even though the Fed chief has been sounding dovish recently, the market is now less optimistic about 3 rate cuts in 2024. 💼 This will continue to be a drag on equity markets globally. In India FPIs may continue to sell. 💼 The question is how will the Indian market respond? It is possible that the dips will get bought since this has been a successful strategy in India and domestic money has been calling the shots here. 💼 Since Nifty is up 3% from the March lows, the market is resilient and the undertone is strong. Valuation comfort is in largecaps. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 A distinct feature of a bull market is its ability to set new highs. This was evident yesterday when the Nifty set a new intraday high. 💼 In this bullish scenario characterised by strong momentum and supported by sustained gush of capital flows into the market, every dip will be bought, imparting resilience to the market. 💼Since the global construct is slightly negative as evidenced by the rising dollar and rising US bond yields ( the 10-year is at 4.3%) the FPIs may be tempted to sell. 💼But FPI selling is not having any major impact on the market since DIIs, HNIs and retail investors are calling the shots now. 💼Even while riding the bull, investors should know that liquidity is overwhelming fundamentals in many pockets of the broader market. This calls for caution. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate