Geojit Financial Services Ltd

💼 After the 14 percent pull back from the March lows the market is struggling to find direction. It appears that the sustained FII buying which played the important role in this rally has run out of steam. 💼 The big FII selling on 20th and 22nd of this month indicates that the FIIs may again turn sellers if the global environment turns unfavourable. 💼 There are some global concerns arising out of the sharp rise in bond yields in US and Japan. Particularly the sharp spike in US bond yields with the 30-year yield touching 5.14% and the 10-year yield at 4.52% reflect concerns surrounding the US debt levels and its fall out on global financial markets. It remains to be seen how this pans out. 💼 The silver lining from the market perspective is India’s strong macros particularly the resilient growth and declining inflation and interest rates. Even when the market turns weak, domestic demand driven segments like financials, telecom, aviation etc are resilient and this is reflected in the strength in the stock prices of the big boys in these segments like ICICI Bank, Bharti Airtel and Interglobe Aviation. This message from the market is important. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 There is slight risk off in global markets. This is evident from the strength in alternate assets like gold and Bitcoin. 💼 The fundamental issue is the high fiscal deficit of the US which the market feels is unsustainable. 💼 The weak US 20-year bond auction and the spike in yields of 5-year, 10-year and 30-year bonds indicate the declining confidence in US bonds. 💼 In Japan, too, bond yields are rising. 💼 Rising US bond yields are usually negative for emerging markets. But the situation is slightly different now. 💼 The root cause of the problem is the unsustainable US fiscal deficit and debt. This may trigger some capital flows away from the US to other economies where prospects for growth and earnings are better. 💼 An important trend from the market perspective is that companies driven by domestic consumption are doing well. 💼 The Q4 results of Interglobe aviation and Bharti Airtel are good examples of this trend. This trend can sustain. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 Spike in uncertainty and risk is impacting the market rather unexpectedly. 💼 Yesterday’s FII sell figure of Rs 10016 crores is a major reversal of their big buying in May and if this persists it has the potential to impact the market. 💼 What caused this sudden reversal in FII activity? A combination of many factors may be responsible: credit rating downgrade of US sovereign debt and the consequent spike in US bond yields, spike in Japanese Govt Bond yields, rising COVID cases in some parts of India and reports of a possible Israel attack on Iran are doing the rounds. 💼 Investors can wait and watch for the events to unfold. 💼 The 30-year JGB yield spiking to 3.14% in the backdrop of the US 30-year yield spiking to 5% couple of days back sends a feeling of disquiet in financial markets. This may not create any near-term impact but is bound to have some medium to long-term consequences. 💼 Investors have to exercise caution. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 In the near-term the market is likely to move to a consolidation phase. 💼 The high valuations will put a cap on the upside with institutional selling emerging on upside. This was evident from the institutional activity yesterday when both FIIs and DIIs emerged sellers, though marginally. 💼 Market dips are likely to be bought into since mutual funds are sitting on a large cash pile. 💼 Globally, the credit rating downgrade of the US has introduced an element of disquiet in financial markets. Even though this is not a near-term threat, it will have a sentimental impact of uncertainty and potential fallouts arising from presently unexpected developments. 💼 Investors can adopt a cautious approach of selling on rallies and buying on dips in the near-term. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 The prime mover of the ongoing rally in the Indian market is the sustained FII inflows of around 23800 crores so far this month. 💼 Of course, the decline in global trade tensions, the rally in global markets led by the US and the India-Pak ceasefire have created the setting for this rally. 💼 FII inflows can continue and the domestic mutual funds sitting on huge cash pile will be eager to buy any dip in the market. This will impart resilience to the market even when valuations are getting stretched. 💼 An apparently perplexing trend from the last trading day is that the market declined despite 14018 crores of institutional buying (FIIs plus DIIs). This indicates that FIIs are increasing their short positions in the derivatives market. So expect more volatility ahead. 💼 An important trend in the market is the sharp rally in defence stocks. Even though this segment has bright medium to long-term prospects, their valuations have become excessive and, therefore, investors have to be extremely cautious. 💼 Some profit booking in this segment would be appropriate. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 When aggressive market activity happens against the near consensus view, the market movement can be sharp. 💼 Yesterday’s 550 point spike in Nifty from the lows was a classic case of such unexpected contrarian trend. 💼 The near consensus view was that FIIs will slowdown purchases in India and might even turn sellers preferring the cheaper Chinese stocks in view of the emerging US-China trade deal. This explains the sharp rise in cash holdings of the mutual funds and DIIs turning sellers. But the FII’s aggressive contrarian move against the prevailing consensus by buying stocks for Rs 5393 crores surprised the majority of market participants. 💼 The consequent short covering in largecaps must have contributed to the sharp 550 point Nifty rally from the lows yesterday. 💼 The momentum now clearly favours largecaps. If the FIIs continue with their buy India strategy the market can further surprise on the upside. But the valuations will get stretched eroding the fundamental support to the market. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 The market appears to be heading for a near-term consolidation phase with the mid and smallcaps outperforming. 💼 The sustained robust FII buying which lifted the largecaps is likely to weaken in the new context of trade deal emerging between US and China. 💼 The possibility of a ‘Sell India; Buy China’ tactical FII trade cannot be ruled out now. This will weigh on largecaps and strengthen the case for further rally in mid and smallcaps, despite the valuation concerns. 💼 The defence stocks are again witnessing renewed buying after the prime minister’s appreciation of the performance of made in India defence weapons. 💼 The medium to long-term prospects of defence companies, particularly those of exporters, look bright. However, the valuations of these stocks are high and, therefore, investors have to be cautious. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 Global markets are in a state of flux moving up and down in response to continuously changing policy scenarios. 💼 Trump’s reciprocal tariff policy which caused tremors in markets is now done and dusted with a deal emerging between US and China. It appears that the trend of weakening dollar is over. 💼 The US 10-year yield has spiked to 4.47% and this might impact the FII fund flows to India which has been keeping the Indian market resilient. 💼 There is also a risk of hot money again moving to cheaper Chinese stocks in the new environment of improving US-China relationship. However, a strong tailwind for the Indian market is the sharp dip in April CPI inflation to 3.16%. This leaves enough room for the MPC to cut rates thrice more in this cutting cycle. This is positive for the market in general and rate sensitives in particular. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼 After the sharp surge in the market yesterday, mainly in response to the ceasefire, it is time to take stock and try to understand the likely direction of the market, going forward. It is important to understand that the sharp 916 point surge in Nifty was not caused by institutional activity. 💼 The combined FII and DII buying yesterday was only Rs 2694 crores. This means the market surge was triggered by short-covering and HNI plus retail buying. This implies that institutional activity is likely to remain subdued in the coming days which may constrain the continuation of the rally. 💼 The agreement between US and China to reduce tariffs for 90 days signals the possibility of the end of the trade war between US and China. This augurs well for the global economy. Since the probability of a recession in the US has come down, Indian IT companies might benefit from the higher tech spending by US companies. 💼 Indian pharma exporters will face pricing pressure in the US from Trump’s executive order reducing drug prices. This will impact their stock prices. . . . #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #Inflation #GeojitOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets