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"A tough week for the market! Investor psychology turned a bit gloomy due to the ongoing geopolitical tensions and a kneejerk reaction from FIIs, which dragged the sentiment. The main indices, Nifty and Sensex, declined by 2.7% and 2.2%, respectively. While bears smashed mid and small caps, which plunged by 5.2%/7.4%. From the recent high, the main indices slid by ~8%. The sustained selling by FIIs and lack of triggers in the domestic market may impact the near-term sentiment in the market.

The quarter results were impacted due to a tepid demand environment and margin pressure, which dragged FMCG, metal, auto, and realty the most. While IT remained relatively flat and contributed less to the overall losses in expectation of a pickup in BFSI spending and a favourable outlook in US spending. We expect the consolidation to continue in the short term; a reversal in trend will depend on a slowdown in FIIs selling intensity and the outcome of the US presidential election. The domestic macros are largely favouring the market with the unveiling of strong PMI data and reiterating economic growth forecast for FY25 by the RBI. A moderation in valuation, a pickup in earnings in H2FY25, and an expectation of an RBI rate cut in 2025 will provide support to the market. Sectors to watch include consumption, FMCG, infrastructure, new-generation companies, manufacturing, and chemicals."

 

 

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