Geojit Financial Services Ltd

💼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

💼The sustained rally in the US markets which have taken the Dow and S&P 500 above 40000 and 6000 respectively is no longer a tailwind for Indian markets. 💼Expectations that tax cuts promised by Trump and his pro-business policies will boost corporate earnings in US are driving the rally. 💼In India, in contrast, worse-than-expected earnings downgrades for FY25 are weighing on stock prices favouring the bears in the near-term. 💼FIIs may continue to sell and move money to US which has outperformed India so far this year. 💼However, at some point valuations in India will become attractive and this will aid trend reversal favouring the bulls for a short while. 💼The weakness in Chinese stocks consequent to the disappointing stimulus package will turn out to be positive for Indian stocks. 💼Investors should focus in segments where growth is strong like banking, telecom and new gen digital companies. 💼The positive US scenario will be good for IT companies, too. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Two divergent trends are evident in the market now: one, strength in the global market led by the US and two, weakness in the Indian market. 💼The record setting uptrend in the US market is being driven now by the ‘Trump trade’, expectations of implementation of the promised corporate tax cuts and its positive impact on US corporate earnings. 💼The weakness in the Indian market can be attributed largely to the relentless selling by FIIs which continues this month, too. 💼After the massive FII selling of Rs 113858 crores in October, FIIs have so far, in November, sold equity for Rs 16445 crores in the cash market. 💼The rationale for the FII selling is, the elevated valuations in India which appear conspicuous in the context of the earnings deceleration evident in the Q2 numbers. 💼If the Q3 numbers and leading indicators reflect recovery in earnings, the scenario can change with FIIs reducing selling and even turning buyers. 💼Investors will have to wait and watch for the data. Meanwhile, investors can consider shifting some money from the overvalued mid and smallcaps to quality largecaps. 💼This strategy will turn profitable in the medium to long run. . . . #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets