Weekly Wrap Up
This week has been a dull one for traders. The domestic stock market experienced weakness for the third consecutive day, with lower-than-expect Q2 results from many companies. A potential failure of the head and shoulder is also imminent.
The decline was partly attributed to weakness in the global markets, which hurt Indian stocks—this week ended with a development of bearish sentiment.
- Lower Q2 Earnings: Some companies reported lower-than-expected earnings for the second quarter, contributing to the subdued market sentiment.
- US Bond Yields: Rising US bond yields, particularly the US 10-year yield approaching 5 percent, were a significant concern. This was seen as a global headwind for equity markets, including India.
- Impact of Geopolitical Tensions: Tensions in West Asia and the US Federal Reserve's emphasis on continued monetary tightening added a layer of volatility to the market.
- Effect of Oil Prices and Bond Yields: Elevated oil prices and US bond yields were expected to impact India's domestic monetary environment and companies' operational metrics.
- Sectoral Performance: Several sectoral indices registered declines, with Nifty PSU Bank, Metal, Realty, and FMCG declining by over 1 percent each. Auto remained to be the only sector which gained.
- Stock Performance: Kotak Mahindra Bank, IndusInd Bank, and SBI Life Insurance were the top gainers in the Nifty50 club, while ITC was the top loser.
- Technical Analysis: Traders were advised to adopt a hedged approach, considering weak global cues and pressure in key sectors. The Nifty's position relative to the 50-day Simple Moving Average (SMA) was highlighted as a critical level to watch.
Leaders & Laggards:
In the third week of October, 'BTST' and 'Quick Short' were the top performers with 3.58% & 2.90% returns, respectively.
On the other hand, 'Buy High Sell Higher' and 'Trending Ten' were underperformers, with negative 1.48% and 1.28% returns in the same period.
- ITI, or ITI Limited, is a public sector company in India that operates in the telecommunications equipment manufacturing industry. It was among the top performers, with 37.72% returns as a part of the 'Alpha Ally' model.
- KIRLOSBROS, or Kirloskar Brothers Limited, is a well-known Indian company primarily engaged in the manufacturing and distribution of fluid management solutions. It was next in the list of top performers, with a 19.51% return, as a part of the 'Sector Superstars' model.
- IOB, or Indian Overseas Bank (IOB), is a significant public sector bank in India headquartered in Chennai, Tamil Nadu and was among the underperformers, with a negative 14.37%, as a part of the 'Buy High Sell Higher' model.
- AAVAS, or Aavas Financiers Limited, commonly known as AAVAS, is a housing finance company based in Jaipur. It primarily provides housing loans to lower and middle-income self-employed individuals in semi-urban and rural areas. The stock is second on the list with a negative 10.69% return as a part of the 'Buy High Sell Higher' model.
Reads On The Internet:
SEBI and RBI are investigating a dozen alternate investment funds (AIFs) for potential regulatory violations, including "evergreening" of stressed loans and evading foreign investment caps. SEBI is urging AIFs to self-regulate and report assets and liabilities while considering stopping priority payouts to investors in credit funds.
REC Ltd and Bank of India have entered into a consortium agreement to co-finance projects worth Rs 30,000 crore in power, infrastructure, and logistics sectors over the next five years. REC provides long-term loans to the power sector and has diversified into various areas.
Russia's oil share in India's imports rose to 40%, making it the top supplier, as India reduced Middle East purchases. Russian oil imports doubled to 1.76 million barrels per day, while Middle East imports fell to 44% from 60%. OPEC's share dropped to its lowest in 22 years at 46%.
Jio Financial Services, backed by Mukesh Ambani, aims to offer a range of financial products in India, including auto and home loans, partnering with BlackRock for asset management. Their Q2 profit doubled, and they plan to leverage technology for growth, with limited competition risk for established banks.
India's UPI has surged from 1.8 crore to 8,375 crore transactions in 2022-23, becoming a preferred digital payment method, especially in rural areas. UPI's user-friendly, language-inclusive features are driving a financial revolution, bridging the digital divide. Recent features include voice-enabled payments, pre-sanctioned credit access, offline transfers, and NFC-based tap-and-pay.
Intriguingly, Dussehra, beyond its famed triumph of good over evil, holds the remarkable celebration of the Pandavas' triumphant return from exile within its traditions.
As the final year of their exile ended, on the sacred occasion of Vijayadashmi, they reclaimed their weapons and offered devotion to both their arms and the revered Shami tree.
Since then, the Shami tree has stood as a symbol of goodwill, reminding us that even in the face of adversity, the return of hope and the restoration of righteousness are causes for joyous celebration.
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