Geojit Financial Services Ltd

💼 The Fed decision tonight and the interim Budget tomorrow will weigh on markets in the near-term. 💼 Global markets will be keenly watching the Fed comment on the time line and quantum of rate cuts. 💼The first rate cut is likely to come in June 2024. The decline in the 10-year yield to 4.02% is a positive since it will restrain FPI outflows. 💼The domestic market will be focused on the interim Budget particularly on any proposals regarding taxation of investments relating to the capital market. 💼The fiscal deficit and its glide path also is important since growth with stability is hugely important from the market perspective. 💼Stock specific movements are likely in response to sectoral allocations in the Budget. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼It appears that the strong DII and retail support and the consequent resilience of the market is forcing FIIs to reduce their selling. 💼The Fed commentary on Wednesday will influence the US bond yields and consequently the FII strategy. 💼 Large caps like RIL, Bharti Airtel, L&T and ICICI have strength to support the market. 💼 In the near-term, expectations regarding the budget will influence the market. 💼 Market doesn’t expect any major changes in taxation relating to the capital market. 💼 Therefore, any such proposal will have an impact on the market. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 Two important events are due this week: the interim Budget and the Fed meet on rate decision. But these events are unlikely to impact the market in a big way. 💼The Budget will be a vote on account without major announcements capable of impacting the market. 💼Regarding the Fed decision, no rate cut is expected, but the commentary will be keenly watched. 💼The turbulence in the Red Sea is turning out to be a serious issue. Brent crude has spiked to $83. 💼 Stock specific action in response to Q3 results and news is likely. LIC getting RBI approval to raise their stake in HDFC Bank is positive for the latter. 💼 Since FII selling is sustained and high the bears will use rallies to sell. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 Since the tug of war between the FIIs and DIIs continues, volatility will remain high in the near-term. 💼 This volatility may be used by investors to churn their portfolios. 💼 A significant anomaly in the market is the high valuation in some pockets and the fair and even attractive valuation in some other pockets. 💼 For instance, some PSU stocks are flying high on hopes based on order flows. 💼 It will take a long time for these order flows like in ship building , for instance, to translate into profits. And there is no guarantee that it will happen. 💼 On the other hand pockets like banking are fairly valued and the performance and prospects are good. 💼 There is value in bluechips like HDFC Bank. The rising bond yields in US is a matter of concern. 💼 This rally in global stock markets was triggered by the Fed pivot which saw the 10-year bond yield falling from 5% to around 3.8%. 💼 Now the 10-year is back at 4.18% which indicates that the Fed rate cut will come only in H2 of 2024. 💼 A significant take away from the Q3 results is the improving margins of the auto industry. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼The important takeaway from yesterday’s sharp market correction is not the 1.54 % cut in Nifty but the crash in Nifty Midcap and Nifty Smallcap indices by 3.15% and 2.87% respectively. 💼The valuations in the broader market had become excessive and unsustainable as pointed out many times recently. 💼The trigger for the correction came mainly from the sustained selling by FIIs who have sold equity worth Rs 27830 crores during the last 5 days. 💼Some news and rumours also contributed to the selling in the market. There is news that SEBI is tightening the ultimate beneficiary norms for FPIs starting February 1st. 💼This might have triggered some FPI selling. Also, there is a rumour floating around that the finance minister may tweak the LTCG tax taking away the advantages investors are enjoying now. Such rumours are normal during the Budget time. 💼Further selling by FPIs and more corrections in the broader market are likely. 💼Investors may wait for the market to stabilise. Safety now is in fairly priced large caps. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼 In the short-term sentiments influence the market more than other factors. Now, sentiments are positive globally as well as in India. 💼The sentimental support from the mother market is strong since S&P 500 is at record high at 4850. 💼Domestically the Pran Prathishta at Ayodhya has turned out to be a historic mega event boosting national sentiments substantially. 💼These positives augur well for the market in the short run. Q3 results will impact specific stocks both positively and negatively. 💼ICICI Bank’s numbers are excellent, beating the street. With ICICI Bank ticking all the right boxes in credit growth, net profit growth and asset quality, the stock is set to lead the rally in large caps. 💼Investors should also remember that sentimental impact cannot last long. Tensions in West Asia and Red Sea are areas of serious concern. 💼If something goes wrong, the market will be impacted since valuations are high. Therefore, even when optimistic, investors should be cautious. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼The recent correction in the market has not changed the underlying uptrend in the market. 💼FII selling is being countered by sustained DII and retail buying. And the strength of the economy is providing the fundamental support to the market. 💼Therefore, FII selling is not strong enough to pull down the market hugely, unlike in the past when FIIs used to call the shots. 💼This feature of the market can be utilised by investors to buy quality stocks which come under short term pressure due to FII selling. 💼It is important to buy high quality stocks in performing sectors since many unproven stocks in the broader market are flying high on hopes rather than on fundamentals or strong prospects. 💼Hyper speculative/ trading activity has pushed many mid and small cap stocks to frothy valuations. Correction in these stocks is only a matter of time. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼An important trend in the market which has implications for retail investors is the revival of the tug of war between FIIs and DIIs. 💼FPIs have sold equity massively for Rs 20480 crores during the last two days. 💼This is partly in response to the rising bond yields in US where the 10-year yield has risen to 4.16% and partly due to the high valuation in Indian stock market. 💼Since the largest chunk of FII AUM is in banks, they have been selling in banks, mainly HDFC bank. 💼Investors should remember that in the tug of war between FIIs and DIIs in recent years, DIIs always won in the medium to long-term even though FII selling can cause short-term pain. 💼FII selling due to external factors has always been opportunities to buy. This time is no different. 💼Mid and small cap segments are strong despite excessive valuations because there is sustained buying and no selling pressure from FIIs. This anomaly will be corrected in due course. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate

💼At elevated valuations the market needs only a trigger for a sell-off and yesterday this trigger came in the form of HDFC Bank’s worse-than-expected results. 💼It is also important to understand that there was a sell-off in other emerging markets like Taiwan and Korea indicating that this an emerging market correction driven by FPI outflows. 💼FPI sell figure in India yesterday was huge at Rs 10578 crores. 💼In the context of rising bond yields in the US, FPIs may sell again. But this is likely to be countered by DII buying in fairly valued large caps with growth potential. 💼Investors may wait and watch for this turbulence to subside. The resilience in IT stocks in this crash is an indication of the strength of the sector. 💼Apart from IT, large caps like RIL, ICICI Bank, L&T and Bharti have strength to tide over this turbulence. 💼Further dips in HDFC Bank will provide buying opportunities for long-term investors. . . . #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate #StockMarket #inflation #EconomicOutlook #InvestmentOpportunity #EmergingMarkets #MarketUpdate