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Below the Quote on Weekly Market Round-Off by Shrikant Chouhan by Head of Equity Research, Kotak Securities

The Nifty-50 Index and Sensex lost around 4.2% each in the past week, while the mid-cap index lost around 3.1% and small-cap index lost 1.8% outperforming large-caps. Indian Markets underperformed most global markets. The Chinese market was up 22% last week, while other major global markets were weak. The increase in geopolitical tensions between Israel and Iran weighed on risk assets, while crude oil rose by US$5.5/bbl to US$78/bbl.

Sharp gyrations continue in sectoral positioning, as the metals sector (+0.3%) was the only major sectoral gainer, while realty (-8.2%), Auto (-5.9%), capital goods (-4.8%), oil and Gas (-4.4%) and banks (-4.3%) were the major underperformers. Within the Nifty, JSW steel (+4.2%), Infosys (+1.1%) and Tech Mahindra (+1.1%) gained the most, while RIL (-8.7%), Shriram Finance (-8.0%) and Hero MotoCorp (-7.3%) lost the most. On the macro side, (1) PMI manufacturing weakened from 57.5 in August to 56.5 in September, (2) PMI services weakened from 60.9 in August to 57.7 in September, (3) central government expenditure was down 1.2% yoy in 5MFY25 and (4) GST collections growth moderated to 6.5% yoy in August 2024.

In Global news, mounting geopolitical tensions have contributed to a shaky start in October for the stock market. In US, Investors are bracing for Friday’s release of the September payrolls report, which will be the next big catalyst for the market. In Europe, European Central Bank, President Christine Lagarde hinted at another cut in interest rates at the Bank’s next policy meeting, amid increasing signs that inflation is beaten and that the economy is struggling. In Asia, China will unleash more fiscal policies and other support measures to shore up its economy. While Japanese Prime Minister Shigeru Ishiba has asked ministers to formulate an economic relief package to ease the bite of inflation. Oil prices have jumped more than $5 a barrel (Brent at US$ 78/barrel) since the start of the week amid intensifying fears that Israel could launch an attack on Iran’s energy infrastructure.

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