Weekly Market Outlook (29th July to 2nd August 2024)

 

Nifty and Market Sentiment

• Nifty is expected to surpass 25,000 next week, driven by strong quarterly corporate results, government disinvestment plans, and the anticipation of a US Fed interest rate cut in September due to cooling inflation.
• Positive market performance is anticipated in IT, pharma, FMCG, metal, and PSU stocks.

Major Events and Market Outlook

1. Domestic Factors:
• The market rally is expected to continue after closing at a record high on Friday.
• Key drivers include falling US inflation, lower US 10-Year bond yield, a declining Dollar Index, and hopes of a US Fed interest rate cut.
• Strong quarterly results, a targeted fiscal deficit of 4.9% this year and 4.5% next year, government disinvestment plans, falling Brent crude prices, and impressive August F&O rollovers are boosting confidence.
2. Global Factors:
• Focus on the US Federal Reserve's interest rate decision, with the market anticipating a rate cut in September.
• Key quarterly results from major IT players (Apple, Microsoft, Amazon, Meta) will be closely watched.
• Interest rate decisions from the Bank of England and the Bank of Japan are significant.
• The US Fed's commentary will be crucial for global market trends.
3. Sector Focus:
• IT: Continued rally expected following strong results from TCS, Tech Mahindra, Infosys, and Mphasis.
• Auto: Positive trend anticipated driven by good quarterly results.
• Pharma: Upward movement likely to persist after Cipla's impressive Q1 results.
• FMCG: Benefiting from the finance minister's announcement of a ₹2.6 lakh crore spending boost in rural sectors.
• Defense: Attractive after a recent correction and a significant budget allocation.
• Metal: Positive trend expected due to anticipated increase in demand and strong US GDP data.

Global Market Update

• US equity indexes closed mixed with profit booking in mega-cap tech and communication services.
• Investors added exposure in utilities, healthcare, and industrials as the probability of a September interest rate cut increased.
• Nasdaq dropped nearly 2% due to disappointing results from Tesla and Alphabet, while the Dow Jones gained nearly 1% due to in-line personal consumption expenditures price index and rate cut expectations.

Weekly Market Update

• The equity benchmark index surged by 1%, closing at a record high driven by strong buying in large-cap stocks and robust IT and pharma results.
• Nifty gained 1.6%, adding over 400 points post-budget.
• The budget emphasized fiscal consolidation, targeting a fiscal deficit of 4.9% this year and 4.5% next year, with significant capital expenditure.
• Positive factors included reduced import duty on gold, job creation initiatives, and significant rural infrastructure spending.
• Nifty Pharma and Media indices soared by 6%, while Metal, FMCG, and IT indices increased by 3%. Bank Nifty declined by over 2% following poor quarterly results from Axis Bank.
• Globally, markets declined due to weak results from Tesla and Alphabet, and Technical Outlook 

FIIs and DIIs (This Week)

• FII: Net sellers at Rs. 4720 crores.
• DII: Net buyers at Rs. 8109 crores.

Commodity Update (This Week)

• Gold: Declined by 0.5%, closing at $2387/ounce.
• Brent Crude: Declined by 1% to a two-month low at $81/bbl

Corporate Actions (Next Week)

• Monday: Shreyans Industries, Fairchem Organics, Birla Corporation, Deepak Nitrite, D.B.Corp, Automotive Axles, Info Edge.
• Tuesday: Brigade Enterprises, Avanti Feeds, UltraTech Cement.
• Wednesday: HEG, Centum Electronics, DLF, SRF, CRISIL, Sundaram Finance, Steelcast, Bata India.
• Thursday: TIPS Industries, Greaves Cotton, Karur Vysya Bank, MPS, Aditya Birla Sun Life AMC, Oberoi Realty, NAVA, Kirloskar Oil Engines, Hero MotoCorp, Esab India, Tasty Bite Eatables.
• Friday: Sharda Cropchem, Narayana Hrudayalaya, Indigo Paints, C.E. Info Systems, Jubilant Pharmova, Jubilant Ingrevia, Everest Industries, Divi's Laboratories, Coforge Limited, Cipla, Ajmera Realty & Infra India, West Coast Paper Mills.

Quarterly Results (Next Week)

• Monday: Bharat Electronics, Adani Total Gas, Colgate Palmolive (India), HPCL, Indian Bank, ACC, Adani Wilmar, KEI Industries, Vedant Fashions, Pfizer.
• Tuesday: IOC, GAIL India, Indus Tower, Dixon Technologies, Jindal Stainless, Exide Industries, Star Health, 360 ONE WAM, Carborundum Universal, Apar Industries.
• Wednesday: Maruti, Mahindra and Mahindra, Tata Steel, Ambuja Cements, Bank Of Baroda, Bharat Heavy Electricals, Godrej Properties, Mankind Pharma, Prestige Estates Projects, Tata Investment Corporation.
• Thursday: ITC, Sun Pharma, Tata Motors, Dabur India, Tube Investments of India Ltd, Thermax, Kalyan Jewellers India, Aditya Birla Capital, Escorts Kubota, Emami.
• Friday: Titan, GlaxoSmithKline Pharma, LIC Housing, Computer Age Management Services, Zydus Wellness, Ion Exchange (India), Infibeam Avenues, Medplus Health Services, Tamilnad Mercantile Bank, NESCO.
• Saturday: State Bank of India, Bank Of India, Amara Raja Energy & Mobility, CDSL, Capri Global Capital, Sarda Energy and Minerals, Kuantum Papers, Zuari Agro Chemicals, ISF.

Global Data (Next Week)

• US:
• Monday: Dallas Fed Manf Activity.
• Tuesday: FHFA House Price Index MoM, JOLTS Job openings, Conf. Board consumer confidence.
• Wednesday: MBA Mortgage applications, pending home sales, FOMC rate decisions.
• Thursday: Non-farm productivity, S&P global US manufacturing PMI, ISM New orders.
• Friday: Factory orders, Unemployment data.
• Europe:
• Monday: Mortgage approvals (UK), Money supply (UK).
• Tuesday: CPI (Germany), GDP (Germany), GDP (France), Consumer Spending (France).
• Wednesday: Unemployment (Germany), CPI (France), PPI (France).
• Thursday: S&P Global UK manufacturing PMI (UK), Bank of England Bank Rate (UK), Manufacturing PMI (Germany), Manufacturing PMI (France).
• Friday: Industrial Production (France), Manufacturing Production (France).
• Japan:
• Tuesday: Jobless rate (Japan).
• Wednesday: Retail Sales, Industrial Production, Housing Starts, Consumer Confidence.
• Thursday: Manufacturing PMI.
• Friday: Monetary Base.
• China:
• Wednesday: Composite manufacturing non-manufacturing PMI.
• Thursday: Caixin manufacturing PMI.
• India:
• Wednesday: Fiscal Deficit.
• Thursday: Manufacturing PMI.

Conclusion:

Market will remain active towards Q1 results and Global macro updates.  The Union Budget impact is fading away but the capital gain impact will live longer. Stay invested for long term. Short term jitters are an opportunity to invest for long term. Further MF industry is sitting on 1.25cr cash holding hence market has enough liquidity to get invested.