Weekly Stock Market Report: August- Week 1, 2023

Weekly Wrap up

‘Overweight’ & ‘Downgraded’- These were the two terms that caused controlled mayhem in the Indian stock markets this week. As the week started, most of the major indices were holding strong, but the news of Fitch downgrading the United States from AAA, which is the highest possible rating, to AA+, caused panic among investors all over the world.

The panic in the US markets also trickled into our Indian markets, which were down over 1% on Wednesday and another 0.75% on Thursday. Almost all the sectors witnessed a sharp sell-off after this news, as FII turned net sellers after a 3-month purchase streak.

However, the panic was short-lived, as another positive news from 'Morgan Stanley' lifted sentiments. The news was of upgrading India’s rating to ‘Overweight’ from ‘Equal weight’ as the firm believes that the nation's reform and macro-stability agenda supports strong capex growth and a good profit outlook.

For simplicity, an overweight rating means- that the country’s economy (India's) economy is set to perform better in the future.

This news sparked enthusiasm among investors which propelled the market over 0.70% on Friday.

All in all, the Nifty50 ended the week with a negative return of 0.66%, whereas the Nifty500 closed with a return of -0.34%.

Leaders & Laggards:

In the first week of August, IT and Pharma were among the outperformers, whereas all the remaining sectors closed in red.

Even in the downward market, ‘Quick Short’ and ‘Sector Superstars’ were two of the best-performing models, with 1.23% and 1.17%, respectively. On the other hand, ‘High Five’ and ‘Back Up’ were two of the underperformers, with a negative return of 1.79% and 2.12%, respectively.

ZOMATO, or Zomato Limited, which is also one of the leading food delivery platforms, that also provides various other information, including details of menus, contacts, discount offers, quality of service and food, was the top performing stock for this week with 12.63% returns as a part of the ‘Buy High Sell Higher’ model.

IRFC, or Indian Railway Finance Corporation Ltd, located in New Delhi, which is a financing arm of the Ministry of Railways, was the second top performer with 12.34% returns as a part of the ‘Alpha Ally’ model.

SANGHVIMOV, or Sanghvi Movers Limited, a crane hiring company that provides hydraulic and crawler cranes to various industries in the infrastructure and core sector areas. The stock was among the laggards with a negative 4.17% return as part of the ‘Sector Superstars’ model.

GODFRYPHLP, or Godfrey Phillips India, a company that is engaged in the manufacture of cigarettes, chewing products, and trading of tobacco products, underperformed by -3.24% as a part of the ‘Alpha Ally’ model.

Reads On The Internet:

Now you can get a laptop at the price of a mobile phone.

Reliance launched one of the most affordable laptops, JioBook, starting at Rs 16,499.

Zomato turns profitable for the first time.

Zomato, the food delivery platform, has reported a profit of Rs 2 crores for the first time since its inception.

Morgan Stanley upgraded India’s rating and downgraded China's rating.

Brokerage firm Morgan Stanley has recently upgraded India's status to 'overweight' and downgraded China's rating to 'equal-weight'.

Fitch downgraded the US sovereign credit, but that could be overcome soon.

The sharp selloff that happened in the Indian stock markets after Fitch Ratings’ downgrade may not sustain long, as per experts.

While the markets recovered some of the losses on Friday, we are not out of the woods yet. With the degrading credit rating of the biggest economy in the world-US, there could be some headwinds in the near future. However, we should also take a moment to appreciate the strength of our economy, which is currently leading the world.

Till then, splurge a little with your 'recent credited salary' and most importantly, don’t forget to save and invest for building long-term wealth.

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