Weekly Market Report from 19th August to 23rd August 2024

The Indian stock market benchmarks had a calm day of trading on Friday staying within a tight range and key indices Nifty and Sensex closed at 24823 (up by 0.05 pct) and 81086 (up by 0.04 pct), influenced by potential rate cuts by Fed Chairman Powell.However, tensions in the Middle East stayed on investors’ minds as fighting continued in parts of Palestinian territory. U.S. markets traded in the green during the past week. This came after investors looked at a big downward change in payrolls.Indices Movement in weekly basisThe Bombay Stock Exchange (BSE) Sensex rose 0.91 pct on to 81,086 during the week ended August 23, 2024. Nifty also ended green, grew by 1.15 pct to 24,823. Nifty Smallcap 100 grew by 3.48 pct to 19,079, Nifty Midcap 100 rose by 1.56 pct to 58,555, Nifty Bank closed up by 0.82 pct to 50,933. On sectoral basis the NIFTY Metal, Consumer Durables, PSU bank, commodities, jumped by 3.30 pct, 3.16 pct, 2.54 pct, 2.15 pct while other sectorial indices ended green except nifty realty that fell 2.91 pct.FII Flows during the Week Foreign Institutional Investors (FIIs) were net buyers in the equity segment this week, with gross purchases of Rs. 875.72 bn and gross sale of Rs. 826.76 bn, leading to a net inflow of Rs. 48.96 bn. In the debt segment, FIIs were net buyers, buying Rs. 69.92 bn and selling Rs. 47.38 bn, resulting in a net inflow of Rs. 22.54 bn.CommoditiesGold – Gold futures finished substantially higher on Friday, after Fed Chairman Jerome Powell stated at the Jackson Hole Economic Symposium that it is time for the central bank to cut interest rates in response to a deteriorating labour market and slower inflation. Gold futures for December delivery rose USD 29.6, or 1.16 pct, to USD 2,546.30 per ounce on the Comex division of the New York Mercantile Exchange. Spot gold increased USD 27.84, or 1.12 pct, to close at USD 2,512.59 per ounce.Crude – Crude oil prices jumped on Friday after the of the Fed chairman highlighted potential interest rate cuts that would help bolster the economy – and demand for Crude. Prices of Benchmark crude oil futures for October delivery increased USD 1.82, or 2.5 pct, to end at USD 74.83 per barrel on the New York Mercantile Exchange. Brent crude for October delivery rose USD 1.80, or 2.3 pct, to close at USD 79.02 a barrel on London’s Intercontinental Exchange.Top GainersPiramal Enterprise remains top gainer for this week, up by 11.1 pct due to an increase in promoter stake by 3 pct and highlighted that the acquisition of shares aligns with the promoters’ belief in its growth trajectory, further reflecting their trust in the company’s business fundamentals.Voltas gained 10.12 pct on the back of strong Q1FY25 results followed by multiple upgrades by the brokerages indicating strong confidence in the company.Top LosersSun TV network tumbled by 6.38 pct in this weak, in the previous week ending August 16, 2024 as well the stock appeared to be in the losers list due to poor Q1FY25 performance.IGL stock plummeted by 3.99 pct where it has profit booking after reaching near 52 weeks high. From last two trading sessions stock prices are falling.Outlook for coming weakWhat will be eyeing upcoming week is data of Government Budget Value, Foreign Exchange Reserves data on August 30. At the global level, investors are looking to watch GDP Growth Rate, Initial Jobless Claims, Pending Home Sales on August 29, Michigan Consumer Sentiment, Michigan 5 Year Inflation Expectations on August 30.NewsThe minutes from the July 30-31 meeting show Fed rate-setters leaning toward cutting interest rates in September. Some members even pushed to lower rates right away. Most policymakers thought easing policy at the next meeting would make sense if data lined up with what they expected. Many officials saw current interest rates as too tight. A few argued keeping rates the same could slow down the economy more as inflation cools. Everyone agreed to hold rates steady in July. But several policymakers felt the progress in slowing inflation and rising unemployment could justify a possible 0.25 pct cut.Zomato/Paytm – Zomato is set to acquire Paytm’s entertainment ticketing business at a total consideration of Rs. 20.48 bn. The transaction also includes a transition services agreement where the ticketing business will continue to run on the Paytm app for a period of up to 12 months to ensure a smooth transition of the business from Paytm to Zomato. In FY24, the business being acquired generated a combined GOV of Rs. 20+ crore (29 pct YoY growth) and generated sales of Rs. 2.97 bn and Adjusted EBITDA of Rs. 290 mn.The eurozone’s CPI increased to 2.6 pct in July, up from 2.5 pct in June. The rise in CPI was fuelled by a strong increase in energy costs, while food inflation eased marginally. Monthly CPI fell to zero, down from 0.2 pct and in line with forecasts. Core CPI remained constant at 2.9 pct, exceeding initial market expectations of 2.8 pct.According to figures provided by telecom regulator TRAI India’s largest mobile provider Reliance Jio added 19.11 mn (MoM) users in May 2024, against 21.95 mn users in May 2024. In June, Bharti Airtel added 1.25 mn users against ~1.25 mn users in May, while Vodafone Idea lost 0.86 mn customers vs loss of 0.94 users in May. In May 2024, Jio had a wireless subscriber market share of 40.71 pct, while Airtel held a 33.23 pct share and VI’s market share reached 18.56 pct and BSNL had a market share of 7.33 pct.According to DGCA India’s domestic air passenger traffic increased by 7.3 pct to 12.98 mn in July 2024 from 12.1 mn in the same month last year. However, the air traffic in July was lower compared to 13.26 mn people carried by the domestic airlines in June this year. Passengers carried by domestic airlines during January – July 2024 were 92.33 mn as against 88.19 mn during the corresponding period of the previous year thereby registering an annual growth of 4.70 pct and monthly growth of 7.33 pct.Glenmark Therapeutics Inc., USA has launched1 Olopatadine Hydrochloride Ophthalmic Solution USP, 0.1 pct (OTC); compare to the active ingredient in Pataday Twice Daily Relief. According to Nielsen syndicated data for the latest 52 weeks’ period ending July 13, 2024, the Pataday Twice Daily Relief (OTC) market achieved annual sales of approximately USD 26.4 mn.Tata Motorshas announced September 1, 2024 as the record date for the conversion of shares with differential voting rights (DVR) (also known as A-ordinary shares) into ordinary shares. With 99.8 pct votes in favour, company’s DVR conversion plan approved by shareholders. As per the Scheme, the Company shall issue 7 fully paid up New Ordinary Shares of the face value of Rs. 2 each for every 10 ‘A’ Ordinary Shares of the face value of Rs. 2 each, as consideration to the ‘A’ Ordinary Shareholders of the Company.LT’s Transportation Infrastructure vertical has secured an order for Integrated Infrastructure Development project in Town Planning Schemes 2 to 7 under the Navi Mumbai Airport Influence Notified Area (NAINA) Project in Maharashtra. The project also involves the construction of utility works and allied electrical works. The expected order value is to be in the range of Rs. 25 bn – Rs. 50 bn.Amber Enterprises India Limited along with Yujin Machinery Ltd., a South Korea Based Company has incorporated a JV in India, namely Yujin Machinery India Private Limited, to carry on the business of manufacturing of all types of Driving Gears, Couplers, Pantograph and Brakes for various rolling stocks, including all types of wagons, trams, Vande Bharat trains, Indian Railways products, high speed and metro trains, regional rapid transit systems, etc.BEML has Signed MoU with the Indian Navy. This deal marks a big step forward in working together to design, create, build, test, and support crucial marine gear and systems. The deal is aims to boost self-sufficiency in making defense equipment and cut down on buying from other countries.OLA Electric’s S1 X 3 kWh and S1 X 4 kWh scooters has received certification of compliance as per PLI Scheme for the automobile and auto components. Both the S1 X 3 kWh and S1 X 4 kWh scooters have successfully met the stringent minimum localization criteria of 50 pct, as mandated by the Ministry of Heavy Industries. OLA electric is the only pure play 2W EV which has received PLI certificates for 4 products – S1 Air, S1 Pro, S1 X (3 kWh, and 4 kWh).Petronet LNG Limited has entered into a MoU with LTL Holdings Limited (LTL) of Sri Lanka for supply of LNG to LTL’s dual fuelled Power Plant(s) in Kerawalapitiya, Colombo. Both parties, through this MoU, have agreed for development of LNG supply chain from PLL’s LNG terminal, Kochi to LTL’s Power Plant in Kerawalapitiya, Colombo in a time bound manner. The initial term of LNG supply would be 5 years, which is extendable subject to mutual agreement.Welspun Enterprises’ subsidiary has been awarded the LOA by the BMC. This LOA pertains to Rehabilitation of man-entry sewers by trenchless technology, lines –17km (dia 1000mm to 1800mm), in the suburbs of Mumbai City. The contract value excluding GST is Rs. 1.59 bn. This Project is to be executed within a period of 24 months (excluding monsoon).Bharat Electronics Limited (BEL) has secured orders worth Rs 6.95 bn. Major orders comprise of Combat Management System, Communication equipment, Stabilized Optronic Pedestal, Upgrades, Spares, Services etc. With these, BEL has now accumulated orders totalling Rs.59.20 bn in the current FY25.Wipro Limited announced that is has been selected by the John Lewis Partnership (JLP) to transform and modernize the firm’s IT infrastructure. The transformation project will help the UK retailer advance its industry leadership and future-proof its business to drive ongoing, sustainable growth.JSW Energy’s subsidiary company has received Letter of Award for setting up 300 MW ISTS-connected Wind-Solar Hybrid Power Project from NTPC Limited against Tariff based Competitive Bid invited for setting 1,000 MW ISTS-connected Wind-Solar Hybrid Power Projects (NTPC-Tranche-VI).Outlook for the weekGlobal markets rallied on Friday and Indian markets is suggesting a positive opening on Monday after Jerome Powell’s dovish tone at the Jackson Hole Economic Symposium. In a closely watched address, Jerome Powell indicated that the Federal Reserve is poised to lower its key policy rate come September. He stated, “the time has come” to adjust the Fed funds target rate downwards, citing reduced inflation risks. This prospective rate cut, which would be the first in over four years, sparked a wave of optimism among investors.On the economic front, investors will be eyeing the data of Government Budget Value, Foreign Exchange Reserves data on August 30. The Indian government recorded a budget deficit of Rs 1.375 trillion in the first quarter of the 2025 fiscal year, narrowing considerably from the Rs 4.513 trillion in the corresponding period of the previous year. On the same day, traders will be eyeing the Infrastructure Output and GDP data. On the global front, investors would be eyeing few economic data from world’s largest economy, US, starting with Dallas Fed Manufacturing Index on August 26 followed by Redbook, CB Consumer Confidence, Richmond Fed Manufacturing Index, Dallas Fed Services Index on August 27, GDP Growth Rate, Initial Jobless Claims, Pending Home Sales on August 29, Personal Income, Personal Spending, Chicago PMI, Michigan Consumer Sentiment, Michigan 5 Year Inflation Expectations, Baker Hughes Oil Rig Count on August 30. Markets may again try to scale Nifty 25k and possibly a new high, but it could again end up in the distribution zone like we saw last time with defence and railway stocks being sold off. This time it could be some other sector or in general SME stocks which have become multi-baggers.Disclaimer: The views expressed in the blog are purely based on our research and personal opinion. Although we do not condone misinformation, we do not intend to be regarded as a source of advice or guarantee. Kindly consult an expert before making any decision based on the insights we have provided.