Geojit Financial Services Ltd

💼The sudden turn for the worse for the US economy reflected in the ISM Manufacturing index dipping sharply to 46.6 spooked the US and other developed country markets yesterday. This has brought back recession fears in the US. 💼The market which has been soaring on the soft landing expectation has turned nervous on the possibility of a US recession and its impact on the market. 💼The sharp dip in the US 10-year bond yield to 3.95% indicates the market’s fear. 💼This can have an impact on Indian market, too. The rally in India has been sustained more by money flows into the market than by fundamentals. Without fundamental support the rally cannot sustain. 💼It remains to be seen whether the buy on dips strategy will work this time too. Since valuations are high some profit booking, particularly in mid and small caps, can be considered. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The Fed chief signalling a possible rate cut in September is positive for global equity markets. 💼More important, his comments that the US economy is normalising is a shot in the arm for bulls. 💼The dip in the 10-year US bond yield to 4.05 is sharp and this may halt and perhaps may even reverse the FII selling in the cash market in recent days. 💼If both FIIs and DIIs turn buyers the market can spurt today but sustaining the rally would be difficult since valuations are getting stretched. 💼A serious geopolitical risk is the escalation of tensions in West Asia following the killing of top Hamas leader in Iran. 💼The risk of a regional aggravation of the Gaza war is high. 💼Among the early Q1 results the cyclical upturn in automobiles looks impressive and likely to sustain. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Sustained capital flows into mutual funds and the retail investor enthusiasm will keep the market resilient. 💼The elevated valuations continue to be a concern, particularly in the broader market. 💼A healthy trend in the market now is that high quality stocks with good earnings visibility are gaining strength on buying by institutions. 💼The FOMC meet on July 31st and the commentary from the Fed chief will be keenly watched by market participants for clues of rate cuts. 💼At high valuations unexpected triggers can cause market corrections. Therefore, investors have to be a bit cautious chasing stocks now. 💼Partial profit booking is segments which have run up too much too fast may be considered. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The undercurrent of this bull market has turned stronger on positive cues. 💼The soft landing scenario for the US economy and expectation of rate cut by the Fed in September are intact. 💼This will provide the global support to this bull market. The decline in the US 10-year bond yield to 4.17% and decline in Brent crude to $ 81.2 are other supporting factors. 💼In a departure from recent trends both FIIs and DIIs turned buyers last Friday resulting in a total buying of Rs 5320 crores pushing the market sharply up. 💼DIIs which were sitting on cash waiting for clarity on tax proposals in the Budget have started deploying funds, particularly in quality largecaps, which explains the sharp rally in the Nifty. 💼In the current scenario the market is likely to ignore the valuation concerns and march ahead. 💼ICICI bank has posted good Q1 numbers. The market is largely ignoring the good results of banking stocks on fears of potential margin compression due to slow growth in deposits. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The unique feature of the ongoing bull market in India is its ability to climb all walls of worry. 💼The market dismissed all concerns relating to elections, the Budget and the correction in the mother market US. 💼The buy on dips strategy which has played out well in this rally continues to hold good. 💼However, the valuation discrepancy- largecaps fairly valued and mid and small caps highly valued - continues. 💼Long-term investors should exploit this discrepancy by buying quality largecaps on declines. 💼FPIs have again turned sellers and this might put further pressure on largecaps even though the FPI selling is being matched by DII buying. 💼The US Q2 GDP numbers coming better than expected at 2.8% further reinforces the soft landing hope for the US economy. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Global cues have turned distinctly negative with a sharp 3.64% cut in Nasdaq, which is the worst cut in 2024. 💼The tech stocks which have been driving the rally in US are facing the brunt of selling due to worse-than-expected results and news. 💼In India, too, the sentiments have turned a bit negative on the Budget proposals to raise the capital gains tax. 💼More important, there are signs of deceleration in corporate earnings after the impressive 24% growth in Nifty earnings in FY24. 💼The excessive valuations in certain segments in the broader market are unlikely to sustain despite the irrational exuberance of retail investors. 💼The disconnect between earnings and market prices in the broader market has been driven by the sustained fund flows into these segments and irrationally enthusiastic retail buying. 💼Market history tells us that irrational exuberance can last longer than seasoned experts think. But it is always better to err on the side of caution. 💼But on dips strategy has been working throughout this bull run. So, investors can utilise the dips to buy fairly valued largecaps. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Now that the steep increase in STCGs tax and the marginal increase in LTCGs tax on equity is a reality, investors should focus on investing in stocks which can deliver superior returns. 💼In the present context FMCG stocks look attractive from the valuation perspective. 💼Watch out for stocks like ITC and United Spirits. 💼It is important to understand that the Budget strengthens the India Growth Story with focus on growth with financial stability. 💼The fiscal consolidation being attempted through the Budget is a big positive that should not be missed amidst the concerns of increase in capital gains tax. 💼Another important factor is that the removal of indexation benefit on gold and real estate will make equity a superior asset class, relatively. 💼The higher tax on F&O trading is intended to discourage the excessive speculation in this segment and, therefore, is a welcome move. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼A highlight of the Economic Survey, from the market perspective, is the data regarding corporate profitability which has quadrupled in 3 years from Rs 5.3 lakh crores in FY20 to Rs 20.6 lakh crores in FY24. 💼For Nifty 500 companies the corporate profit to GDP ratio has risen to a 15-year high of 4.8% in FY24. 💼The market, which in the long run is a slave of earnings, is discounting this sharp turnaround in earnings. 💼Corporate profitability is likely to improve further in FY25. This can keep the market resilient despite elevated valuations. 💼The market participants will be closely watching for any tweaks in LTCGs tax. 💼If there are no changes in LTCGs tax that will be a big relief for the market and the market is likely to react positively to that. 💼Stock specific reactions will depend on the Budget proposals for specific sectors. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Going into the Budget the market will be trading cautiously. 💼The pressure on the broader market is likely to continue since there is more scope for profit booking. 💼It is important to understand that the market expects a positive Budget which is growth oriented and fiscally prudent with income tax reliefs for the middle class. 💼Also the market expects status quo on the Long Term Capital Gains taxation. 💼If there is any disappointment in these areas the market can react negatively. 💼On the other hand, if the Budget delivers on expectations, aggressive retail buying can lift the market to new highs. 💼President Biden opting out of the presidential race is unlikely to influence the market now. 💼Market will wait for clarity to emerge on Trump’s winning chances. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets