Geojit Financial Services Ltd

💼The PPI inflation numbers from the US indicate softening of inflation, and a confirmation of this declining trend is likely from the CPI numbers coming today. 💼The US market moved up yesterday on anticipation of this and a rate cut by the Fed in September. 💼If the rate cut is by 50bp, the US market will remain resilient lending support to global markets. This is the likely scenario. 💼On the other hand, if the Fed disappoints with no rate cut, the market will sell off and this will have repercussions globally. 💼In India the pattern of FII selling on valuation concerns and DII buying supported by money flows continues. 💼Some segments like defence related stocks which have run far ahead of fundamentals are witnessing corrections. 💼Financials continue to be under pressure on concerns arising from rising costs of deposits. For long- term investors quality banking stocks offer value. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Market’s dismissal of the Hindenburg report as inconsequential is significant. 💼This further reinforces investors’ confidence in the success of the buy on dips strategy which has been one of the main driving forces of this bull run. 💼The market which has been climbing all walls of worries has climbed this Hindenburg wall too, instilling confidence in retail investors and DIIs flush with money. 💼However, it is important to understand that Q1 results indicate slight moderation in earnings growth and, therefore, investors need expect only modest returns in FY25. 💼Elevated valuations in the broader market continue to be a concern. 💼The dip in CPI inflation in July to 3.54 % is positive. But the MPC is unlikely to be moved for a rate cut soon since the dip is mainly due to the base effect. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼Global as well as domestic factors are likely to influence the market this week. 💼Globally stock markets will be keenly watching the US consumer data and the core CPI numbers which will indicate the strength/ weakness of the US economy. 💼Stability in yen indicates that the fears surrounding the yen carry trade are behind us. Therefore, the likely trends in the US macros and the Fed rate cut expectations are likely to influence markets much more any other factors. 💼Domestically, there is the Hindenburg report and its likely fall out. 💼It appears that this “revelation” is unlikely to impact the market meaningfully. 💼The buy on dips strategy which has been working well in this bull run is likely to work again. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The sharp rebound in US markets yesterday indicates that the recession fears were a bit overdone. 💼The latest initial jobless claims came lower than expected indicating that the labour market is not loosening as many sceptics feared. 💼However, it is important to understand that the US economy is slowing down, and along with the struggling Chinese economy, it can pull down global growth in the near term. 💼Indian valuations continue to remain elevated and, therefore, there is no room for sustained rally in the market. 💼Tech stocks are likely to stage a recovery today drawing inspiration from the positive US cues. . . . #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The recent trend in institutional activity in the market indicates a clear trend. 💼FIIs are in a risk-off mood and are playing it safe with sustained selling. 💼During the last four days FIIs have sold for Rs 20228 crores in the cash market. 💼This is a rational thing to do given India’s elevated valuations and the concerns surrounding recession fears in US and further issues relating to the unwinding of the yen carry trade. 💼The Indian market has again turned resilient since the FII selling is evenly matched by DII buying which touched Rs 19278 crores during the last four days. 💼DII buying, too, is a rational decision since they have to deploy the funds flowing into their schemes. 💼The heightened volatility in the market triggered by US recession fears and the unwinding of the yen carry trade is likely to persist for some time. Investors should wait for clarity on these two issues. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼After the twin jolts from US recession fears and the unwinding of the Yen carry trade, stock markets globally are slowly limping back to stability. 💼The message from Bank of Japan that “rates will not be hiked when markets are unstable” will help in stabilising the Yen and prevent further massive unwinding of the Yen carry trade. 💼Even though FIIs were big sellers in India in the cash market during the last three days, their selling is being matched by DII buying. 💼This countervailing investment by DIIs can impart resilience to the market. 💼It appears that the exuberance of retail investors has taken a knock after the crash in the broader market. 💼Market valuations continue to remain elevated. There is value in financials. At this juncture in the market, investors should prioritise largecap investment over the mid and small caps. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼When market valuations are elevated, unexpected news and events trigger a market crash. This was what happened yesterday in most asset classes, globally. 💼Fears of recession in US and unwinding of the Yen carry trade along with tensions in the Middle East contributed to the crash. 💼It is important to understand that the correction in India was relatively lower compared to most markets. 💼Once again, domestic investors came to the rescue of the market with DII buying of Rs 9155 crores when FIIs sold for Rs 10073 in the cash market. But for the DII buying the crash would have been steeper. 💼There are many unknown factors like the total volume of the Yen carry trade. This can influence the market, going forward. 💼Yesterday around 600 stocks in the mid and Smallcap segments were locked in the lower circuit. This is the risk in investing in the broader market. 💼Quality largecaps were steady despite the correction. Domestic liquidity flows can facilitate a recovery in the markets. 💼It appears that the US recession fears are a bit premature and overdone. Investors need not panic. Quality largecaps can be slowly accumulated. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼The rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. 💼This expectation is now under threat with the fall in US job creation in July and the sharp rise in US unemployment rate to 4.3%. Geopolitical tensions in the Middle East also is a contributing factor. 💼Another significant factor is the unwinding of the Yen carry trade which is bleeding the Japanese market. 💼The crash in Nikkei by above 4% this morning is an indicator of the crisis in the Japanese market. 💼Valuations in India, driven mainly by sustained liquidity flows, continue to be high particularly in the mid and smallcaps segments. 💼The overvalued segments of the market like Defence and Railways are likely to come under pressure. 💼The buy on dips strategy which has worked well in this bull run, is likely to be threatened now. 💼Investors need not rush to buy in this correction. Wait for the market to stabilise. #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets #StockMarket #inflation #EconomicOutlook #MarketUpdate #InvestmentOpportunity #EmergingMarkets

💼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