Markets are experiencing an unusual fall without any major crisis, driven by a slowdown in corporate earnings and exaggerated reactions. Despite negative sentiment, some positive indicators like GST collection and improved earnings suggest potential for recovery, especially in the discretionary consumption and capex sectors.
Investec, Jefferies, and Nuvama have retained 'Buy' ratings on UltraTech Cement, Apollo Hospitals, and Crompton Greaves Consumer Electricals Ltd, respectively, indicating strong upside potential for each stock.
Despite multiple measures by the Government of India and the RBI, Foreign Institutional Investors (FIIs) have continued to reduce their holdings in Indian equities. The ongoing selling trend has resulted in significant outflows from the cash market, reflecting cautious investor sentiment.However, despite this broad-based selling, FIIs have selectively increased their stakes in certain companies, showing confidence in certain sectors. Domestic brokerage firm Kotak Institutional Equities has compiled a list of companies where FIIs continued to add their positions through the quarter ended December 2024:
Overvaluation, especially in mid and small caps, and weak corporate earnings have weighed on sentiment. A slowdown in rural and urban consumption, along with tightening credit, has added to the pressure.
Rail Vikas Nigam Ltd (RVNL) has secured a Rs 135.66-crore contract from Central Railway for the Bhusaval-Khandwa section. The project, aiming to enhance railway freight capacity within 24 months, involves the design, supply, and commissioning of 132/55 KV traction substations and posts. RVNL shares saw a recent decline despite significant historical gains.
Shares in Australia and Japan opened lower after the S&P 500 lost 1.6% Thursday, erasing its gains for the year. The Nasdaq 100 declined 2.8%, as tech stocks weighed on US benchmarks.
Rich valuation amid rising uncertainty in demand from the US, its largest market, is expected to keep the stock range-bound in the short term, while sustained momentum in deal wins and expected margin expansion will keep long-term prospects intact.
The first week of the month saw inflows of 4,970 crore as funds flowed into Indian debt in anticipation of a rate cut. The second week, however, saw outflows of 8,163 crore as a rate cut materialised and the rupee touched record lows, making Indian bonds less attractive to foreign investors, experts said.
The movement is a 24-hour economic blackout where consumers are not supposed to buy from corporations, avoid all nonessential purchases and if necessary, only shop at local businesses.
The reason for valuations to be at this level is because corporate balance sheets are in the best of health and the debt-to-equity is at the lowest historical levels of 0.55, while companies' capacity utilisation is at 80%, he said.
