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Indian Stocks In Green After Touching Four-Week Low

By LokMarg 29th September 2023

Indian stock indices edged marginally higher on Friday morning after touching nearly a four-week low the previous session, tracking Asian peers and relatively firm overnight US market cues.

Benchmark Sensex and Nifty were 0.2 per cent higher each from their Thursday closing. Nifty metal, pharma, PSU bank sectoral indices were the top movers this morning.

“The ‘triple whammy’ of up-trending dollar, US bond yields and Brent crude is showing signs of easing. If this trend continues it will facilitate a recovery in markets. Stability in the US market yesterday also can be a supportive factor,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Lately, the indices slumped sharply after the US central bank, while keeping its interest rate steady in the September meeting, hinted that it may again hike rates going ahead if need be, in its fight against inflation.

Rising global crude oil prices and subsequent strengthening of the US dollar also weighed on the financial markets.

Going ahead, the RBI monetary policy scheduled for October 4-6 will be monitored closely by the investors. RBI typically conducts six bi-monthly meetings in a financial year, where it decides interest rates, money supply, inflation outlook, and various macroeconomic indicators.

RBI in its past three meetings – April, June, and August — held the repo rate unchanged at 6.5 per cent. The repo rate is the rate of interest at which RBI lends to other banks.

According to SBI Research, the monetary policy committee is expected to yet again pause the key repo rate.

“Domestically, we believe at 6.50%, we are in for a prolonged pause as seasonality of inflation is tapering first…,” SBI Research report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, said recently. (ANI)

Successful G20 Summit Brings Cheers To Indian Stock Investors

By LokMarg 11th September 2023

Indian stock indices started Monday’s trade on a firm note, taking cues from the overall successful G20 Summit in New Delhi.

The consensus on the New Delhi declaration by all G20 member countries despite a divided house given the ongoing war in Ukraine and the West’s sanctions on Russia, the ambitious rail-port economic corridor deal to connect India-Middle East-Europe, and the launch of Global Biofuel Alliance on the summit sidelines seemed to have attracted investors to bet in the market.

Sensex and Nifty were 0.3-0.4 per cent higher from their Friday close of 66,861.16 points and 19,910.10 points, with all sectoral indices in the green. Last week, Indian stocks ended at a high to log their best week in over two months.

Companies involved in railways, ports and infrastructure are the top gainers today.

Moreover, foreign portfolio investors (FPIs) continuing to be net buyers in Indian stock markets for the sixth consecutive month until August supported market sentiment. They bought equity assets worth Rs 1.31 lakh crore cumulatively in 2023, data showed.

“The G20 Delhi Declaration and India’s diplomatic triumph can trigger a continuation of the positive market mood and momentum,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“More importantly, the inclusion of the African Union in G20 and the proposed India-Middle East-Europe Corridor have positive economic and market connotations,” Vijayakumar added.

Citing an example, he said the inclusion of the African Union in G20 is positive news for Bharti Airtel which has a significant presence in Africa.

Going ahead, August inflation data in India and the US, expected to be released on Tuesday and Wednesday are likely to be the next market trigger for fresh cues.

Retail inflation in India rose sharply in July to 7.44 per cent and in the process breached RBI’s 6 per cent upper tolerance target, largely due to a sharp spurt in vegetable, fruit, and pulses prices. (ANI)

Sensex Hits Record High On Overall Firm Macro-Economic Conditions

By LokMarg 21st June 2023

Indian stock indices, which have been buoyant over the past several sessions, touched their all-time highs during Wednesday’s trade. The rise in domestic stocks is in tune with the global market rally and firm domestic macro fundamentals.

Sensex touched its record high of 63,588 points to later settle at 63,523 points, up 0.31 per cent.
Strong fundamentals including a firm GDP outlook, moderate inflation and strong purchases by foreign investors saw the markets trading in the green.

“Sensex rallying to an all-time-high is in tune with the global rally in stock markets. Most markets are at 52-week highs. Last year, global markets had corrected discounting a US recession early this year and its impact on global growth and corporate earnings,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Vijayakumar, however, cautioned a sustained rally beyond the record highs is difficult since current valuations of stocks in India are rich.

Sensex, so far, accumulated 4 per cent returns this year, rising about 23 per cent over the past 12 months.

“Benchmark Indices touched new highs today on the back of a sustained increase in capital expenditure by the government coupled with rising manufacturing PMI (index). Despite the increase in interest rates we are witnessing rising credit demand and India Inc today can boast of much better Balance Sheets than ever before,” said S Ranganathan, head of Research at LKP Securities.

Going ahead, the slow progress of the southwest monsoon may remain a concern for the financial markets. Monsoon, typically, has a bearing on the country’s economic outlook.

Southwest Monsoon hit India on June 8, arriving in Kerala a week after the scheduled onset of June 1.

The monsoon normally hits Kerala on June 1, with a standard deviation of about seven days. It is crucial, especially for the kharif crops. The country has three cropping seasons — summer, kharif and rabi.

Amid the markets posting record trading numbers, Prime Minister Narendra Modi’s ongoing US visit and possible defence deals between the two countries have brought the focus back on the Indian defence stocks. Defence stocks have performed quite well, with many accumulating manifold returns, over the past few years owing largely to the government’s aggressive indigenous defence manufacturing push.

PM Modi is currently in the US on his maiden state visit to the country at the invitation of President Joe Biden and First Lady Jill Biden. After attending Yoga Day celebrations at the UN headquarters later on Wednesday, PM Modi will travel to Washington DC where he will be accorded a ceremonial welcome at the White House on June 22. (ANI)

Sensex Falls 1,000 Points Over Global Covid Concerns

By LokMarg 23rd December 2022

The losses in the domestic stock indices widened as the session progressed on Friday and they settled sharply lower, tracking weak global cues as the fear of the Covid surge kept investors at bay.

The benchmark indices extended losses for the fourth straight session and marked the sharpest single-day fall in about three months.
Sensex closed the session at 59,845.29 points, down 980.93 points or 1.61 percent, whereas Nifty closed at 17,806.80 points, down 320.55 points or 1.77 percent.

Among the Nifty 50 stocks, Adani Ports, Adani Enterprises, Hindalco, Tata Steel, and Tata Motors were the top five losers.

As many as 47 of Nifty 50 stocks declined today. Cipla, Divis Labs, and Titan were the only gainers.

“European stock markets edged higher Friday in thin holiday-affected volumes while most Asian markets indexes fell after forecast-beating US data fuelled expectations that the Federal Reserve will lift interest rates well into next year,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

“US inflation data due later Friday also caused concerns that it may be yet another reason for the Federal Reserve to harden its resolve to pursue aggressive policy,” Jasani added. (ANI)

Stock Market To Remain Volatile Ahead of Diwali Festival

By LokMarg 8th October 2022

By Gyanendra Kumar Keshri

Corporate earnings and the central bank’s action amid a slide in the value of the rupee are likely to keep the Indian equities markets’ key indices – Sensex and Nifty – volatile in the coming weeks ahead of the Diwali festival.

The country’s largest IT firm Tata Consultancy Services (TCS) is scheduled to kickstart the Q2 earnings season on October 10.

According to TCS earnings release, “Tata Consultancy Services Limited will announce its results for the Second Quarter of FY 2023, ended September 30, on Monday, October 10, 2022, after-market trading hours.”

It will be followed by the announcement of the quarterly results by other IT giants like Infosys, HCL Technologies, Wipro, and Tech Mahindra. HCL Technologies and Wipro are scheduled to announce Q2 results on October 12 followed by Infosys on October 13.

Markets will closely watch the profit margins and earnings forecasts by the IT giants, especially in view of the challenges being faced due to the US Federal Reserve action.

“High-frequency indicators point towards improvement in activity and the early trends of festive demand appears strong. As we enter the Q2FY23 earnings season, the focus would be on corporate commentary on demand and margins,” said Shibani Sircar Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company.

Going ahead, there are multiple global macro factors at play and higher interest rates and inflation are likely to be sticky in the developed world. Indian growth outlook appears stable and a relative outlier. However, given the outperformance of the Indian markets and with relative valuations appearing stretched, it is possible that markets see some volatility in the near term. In the medium term, the outlook for equity markets remains healthy, given the strength of domestic macro growth and corporate earnings trajectory, Kurian said.

During the week that ended Friday, the markets witnessed volatility. It started the week on a negative note but a rally in the middle of the week helped the key indices register decent gains.

The 30 stock S&P BSE Sensex ended the week at 58,191.29 points, registering a gain of 764.37 points or 1.33 percent during the week.

The broader Nifty 50 of the National Stock Exchange gained 220.3 points or 1.28 percent during the week. It closed at 17,314.65 points on Friday, the last trading day of the week.

On the last trading day of the week, the key indices witnessed selling pressure but turned flat towards the end of the day. However, the indices closed with marginal loss.

On Friday, Sensex closed 30.81 points or 0.05 percent lower, while Nifty ended the day with a loss of 17.15 points or 0.1 percent.

Besides corporate earnings, global developments will have a significant impact on the markets. In the past couple of weeks, the equities markets have been volatile mainly due to global developments.

The main factors to watch for are the likelihood of further aggressive tightening by the US Federal Reserve and the other central banks and the continuing depreciation of emerging market currencies, the potential for an economic slowdown in the global economy, according to Joseph Thomas, Head of Research, Emkay Wealth Management.

The Indian rupee has also been under pressure in line with the currencies of the other emerging markets. The rupee touched a fresh record low of 82.42 during the week. On October 7, the Indian rupee closed at 82.32 against the US dollar, which is 98 paise lower when compared with its September 30 closing of 81.34 against the US dollar.

The Reserve Bank of India (RBI) seems to be burning its kitty to defend the currency. Due to the RBI action, the performance of the rupee has been much better than the currency of the other emerging markets.

However, the RBI’s action has taken a toll on the country’s foreign reserves. India’s foreign exchange (forex) reserves slumped by $4.854 billion to $532.664 billion for the week ended September 30, the lowest level since July 2020.

This is the lowest level of India’s forex reserves since the week ended July 24, 2020. The forex reserves had slumped by $8.134 billion during the previous reporting week.

As per the Reserve Bank of India’s weekly statistical supplement, foreign currency assets, which are the biggest component of the forex reserves, dipped by $4.406 billion to $472.807 billion during the week ended September 30.

“Indian equity markets remained volatile during the week. Despite the volatility, India continues to outperform MSCI emerging market and MSCI world indices. Growth in India has been resilient even as developed economies grapple with slowing growth and higher inflation,” said Kurian.

The US Federal Reserve remained hawkish and raised key policy rates 75 basis points or 0.75 percent recently. The monetary policy tightening stance of the US Fed resulted in a decline in the equities markets globally. It has also put pressure on emerging markets’ currencies.

In India, RBI hiked the policy repo rate by 50 basis points to 5.90 percent, largely in line with consensus expectations, continuing to frontload tightening to counter inflation risks.

Going ahead it is likely that RBI’s rate decision would be guided by domestic considerations whereby average CPI inflation is expected to moderate in FY24. Higher than-expected tightening by the US Fed and geopolitical uncertainties remain the key risks, Kurian remarked. (ANI)