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Below the Quote onweekly market outlook from Vinod Nair, Head of Research at Geojit Financial Services

"Investors' hope for a June rate cut were dashed by higher-than-expected inflation in the US, compounded by positive US employment and manufacturing data. Moreover, escalating geopolitical tensions in the Middle East, alongside supply concerns, have propelled crude prices upward, impacting overall market sentiment. Meanwhile, gold prices experienced an uptick due to geopolitical uncertainties, increased central bank purchases, and heightened safe-haven demand. Consequently, emerging markets saw a late-week consolidation. Conversely, European markets demonstrated strong performance, buoyed by indications from the ECB suggesting a potential rate cut in the near term. 

On the domestic front, FIIs are exercising caution given the subdued expectations for Q4 corporate earnings and the premium valuations of mid- and small-cap stocks. Within the IT sector, consolidation persists due to lacklustre Q4 earnings amid slowdowns in spending and uncertainties surrounding US policy rates. Profit-taking is evident in banking stocks, particularly in PSU banks, as the banking sector’s loan growth is moderating, and valuation has surpassed long-term averages. Conversely, the auto and realty sectors are showing resilience, driven by expectations of strong earnings momentum. India's CPI point towards a marginal increase in near-term inflation and industrial production may show signs of moderation. Investors are closely monitoring Q4 earnings and geopolitical events, which are poised to shape market direction. Large-cap stocks are viewed as a safer bet amidst heightened volatility given stable earnings outlook and valuation"

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