MARKETS HAVE RESUMED UPTREND TRAJECTORY
What a roller coaster ride in the market! Just after the exit poll, Nifty made a new lifetime high at 23,338. The next day, it corrected towards 21,281 points, reflecting a 2000-point movement. Then again, we have seen a tremendous recovery of 2000 points, and markets are now back above its closing of last Friday. So we have seen a wild seesaw of 2000 points, but it seems like bulls are back, and every small decline is being bought.
Commenting on the market volatility, we want to tell our investors that ups and downs are part and parcel of markets. What we saw was perhaps one bad result where a lot of expectations were built in, and that was not delivered. That’s the reaction we saw in markets on the election result day.
We believe that the future of the company really changes when either the story or the storyteller changes. None of that has happened, at least for now, as the BJPled NDA will likely form the next government. That is the reason our medium to long-term views do not change much, and so we don’t think anything is getting derailed here.
The markets have resumed the uptrend trajectory as we await clarity as to what the new government will look like, but the India growth story remains intact. Everything that is grabbing attention at the moment will be classified as 'noise' a few years from now.
Lastly, we had the important RBI MPC meeting this week, and the governor, as expected, has kept interest rates unchanged at 6.5% for the 8th consecutive time. Not only this, the RBI for FY25 has upgraded the GDP growth to 7.2% from earlier 7% while the CPI Inflation is estimated to remain at 4.5%.
With this, let us present to you the weekly market review.
How Did the Markets Fare Last Week?
On a weekly basis ended on Friday, the Indian benchmark indices ended in green. Sensex and Nifty were up 3.0% each, while Midcaps were up 2.9%.
What Might Keep the Markets Busy Into the Next Week?
It will be a busy week from a political point of view as all eyes lead to Delhi with all of NDA’s allies backing PM Modi for the 3rd term so the swear-in ceremony and discussion regarding distribution of portfolios to ministers will be very crucial. Apart from this we have the very important inflation data, manufacturing and industrial output on the domestic front.
Globally, we have the FOMC Meeting scheduled for 11-12 June, which is also very important. We will know about the inflation trajectory and the likelihood of interest rate cuts ahead. Data points like initial jobless claims, producer price index, and Fed official speech will be watched closely.
Crude and FII Flows
Brent Crude Oil prices traded below $80/bbl even as Saudi Arabia signalled concerns over the demand outlook with cuts to its crude prices. On the other hand, FIIs continue to remain net sellers for the week.
Sector in Focus
FMCG, realty and IT remained in focus during the week.