Dear Traders,
As we move deeper into the Q2FY25 earnings season, several companies have already reported strong numbers, including Justdial, Anand Rathi Wealth, and TARIL. Next week promises even more activity as more firms release their results.
Global Macro Factors 🌍
This week, global macro factors remained mostly neutral with a slight negative bias. Crude oil saw a marginal rise of 1.02%, now trading around $79 per barrel. Gold prices also edged up by 0.32%, currently at $2,674.20.
The dollar index increased by 0.42% and is trading at 102.92. Meanwhile, the rupee fell slightly, hitting a new all-time low as USD/INR moved up by 0.09%. The US 10-year Treasury Yield crossed the critical 4% mark, reaching 4.10% this week, up from 3.98% last week—a worrisome sign for equity investors. The S&P 500 was down sharply by 1.11%, currently trading at 5815.03.
On the domestic front, the RBI’s Monetary Policy Committee (MPC) held its meeting, and as expected, kept the repo rate unchanged. However, the RBI shifted its policy stance to ‘Neutral,’ signaling a more cautious approach going forward.
Market Performance 📈
Following last week’s steep decline, many investors feared that the market downturn might continue. However, as we anticipated, the likelihood of further significant falls was low, and this week saw some consolidation. While the short-term trend remains bearish, the long-term outlook is still positive. Large-cap stocks, which took a significant hit last week, failed to bounce back, likely due to continued selling by Foreign Institutional Investors (FIIs).
– Nifty 50: Down marginally by 0.20%.
– Nifty 100: Flat for the week.
– Nifty 500: Up slightly by 0.32%.
– Nifty Midcap 100: Rose by 1.26%.
– Nifty Smallcap 100: The best performer, gaining 1.33%.
The advance-decline ratio was encouraging in the mid and small-cap segments, though caution is advised as these spaces still carry some speculative froth.
Top Gainers
– Trent led the Nifty 50 with an impressive 11.94% weekly gain.
– Divi’s Labs topped the Nifty 100, surging by 13.35%.
– Usha Martin led the Nifty 500 with a stellar 20.25% gain.
– CG Power was the top performer in the Midcap 100, and Triveni Turbine led the Smallcap 100 space.
Sector Analysis 📊
The sectoral performance this week was mixed. Some sectors remained flat, while others rallied or declined.
– Nifty Pharma was the top sectoral gainer, rising by over 2%.
– The Auto sector followed closely with a 1.97% gain.
On the downside, FMCG and Metal stocks faced solid selling pressure, both dropping by over 1.5%. PSU Banks and Energy stocks were also weak this week.
Market Breadth
We track market breadth by the percentage of Nifty 500 stocks trading above their 50-day Exponential Moving Average (EMA). This number remained stable at around 45% this week, after a sharp decline previously. As long as this metric stays within the 40-70% range, the market remains in a healthy zone. Should the market continue its pullback, we could see quality stocks becoming available at more attractive valuations.
Sectors to Watch
In the coming week, keep a close eye on Banking, Realty, and Metal stocks, as they may present interesting opportunities.
That’s all from my side this week!
Happy Trading,
Mayank Singh Chandel
SEBI Registered Research Analyst
INH000013350