Monthly market commentary, knowledge series and more from FinKasturi Nivesh. 9 posts in 2023.
The Month That Was November 2023
· Category: Global Markets
November 2023 was a positive month for the Indian and global markets. The Nifty closed the month with impressive gains, showcasing a 5% increase. Notably, the Mid-cap Index and Small-cap Index outperformed the Large-cap Index, registering gains of 10% and 12%, respectively. This bullish trend was mirrored across various sectors, with realty, oil & gas, and healthcare gaining 18%, 13%, and 11%, respectively. On the global front, most markets closed in positive territory. Brazil, South Korea, and Germany gained 12%, 11%, and 10%, respectively.
Key developments during this period included the US Fed maintaining the policy rate, Moody’s downgrading its outlook on US debt, and the Reserve Bank of India tightening norms for personal loans and credit cards. India's October CPI inflation moderated to 4.87%, and WPI inflation moderated to (-)0.5% while September IIP growth stood at 5.8%. Furthermore, FPIs bought US$25 mn in Indian equities in the secondary market while DIIs bought US$1.7 bn during last month.
Despite the global economic landscape presenting challenges, India's domestic macro parameters have remained stable. Post strong GDP growth posted in Q2FY24, the full year growth outlook for India has been revised upwards to 7% by RBI, reflecting optimism in the country's economic trajectory.
In terms of the market outlook, geopolitical tensions and FII outflows have impacted investor sentiments globally. However, India's domestic macro parameters, stable liquidity, and supportive government policies bode well for the markets over the medium term. Comprehensive win of ruling party in recent state elections has removed uncertainty over outcome of next year's General Election which augur well for markets. The festive-led consumption, ongoing recovery in the capex cycle, and encouraging government policies are expected to contribute to corporate earnings growth of 15-20% in FY24.
Investors should stay positive on Indian equities over the medium term, with promising prospects in sectors such as Financials, Consumption, Cement, and Capital Goods. These sectors are poised to benefit from consumption growth and capex recovery.
In conclusion, November 2023 has not only seen impressive market performances but has also reinforced the resilience and potential of the Indian economy. Happy investing!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of October Global equity markets were under pressure amidst rising yield on US Government Securities and geopolitical tension in Middle East region. S&P500 index posted a loss of 2.8% during the month while UK fell by 3.7%. Owing to negative global cues and selling by FIIs, Nifty50 Index fell 2.8% during the month. Midcap index also witnessed profit booking resulting in a fall of 4.1%. Among the sectors, real estate gained while power, healthcare and metals declined the most. India's Sep CPI inflation dropped to 5% from 6.8% in Aug, due to fall in vegetable prices. FIIs sold net USD 3 bn worth of Indian equities while DIIs bought USD 3.3 bn during the month.
Market Outlook
Geopolitical tension has come to the fore during last few weeks affecting investor sentiments adversely. In the near term, this factor could act as an overhang on global equity markets. Even though Indian markets have also been affected via FII outflow and fears of rising crude oil prices, domestic macro parameters remain stable which should augur well for our markets over medium term. Domestic liquidity in terms of SIP flow into equity mutual funds are touching 17k crore per month which provides support to Indian markets. Festive led consumption, ongoing recovery in capex cycle and supportive government policies should lead to corporate earnings growth of 15-20% in FY24. We stay positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of September most global equity markets closed in red on the back of rising bond yields in USA and Europe. While rate of inflation is on a downtrend, US Fed maintained hawkish stance raising fears of "higher for longer" interest rate. Minutes from July’s US Fed meeting suggested that most members are in favour of a 25 basis rate hike, while a few reckon that there should be no more hike. S&P500 index posted a loss of 4.6% during the month of September. Indian equity markets were outliers with Nifty50 Index posting a gain of 2% during the month while Mid-cap and small-cap indices outperformed posting returns of 3.6% and 4.1% respectively. Among the sectors, Electric Utilities (9%), Telecom (8%), Capital Goods (5%) and Diversified Financials (5%) did well. During the month JP Morgan announced that it would include Indian government bonds in its emerging market debt index. India's Aug CPI inflation dropped to 6.8% to 7.4% in July, due to reversal in vegetable prices. July IIP growth was strong at 5.7% vs 3.8% in June. FIIs sold net USD 1.9 bn worth of Indian equities while DIIs bought USD 2.1 bn during the month.
Market Outlook
High interest rate environment in developed countries and geopolitical tension have resulted in volatility in equity markets globally. Uncertain global cues have affected FII flows into Indian markets over last few weeks. However, owing to robust macro fundamentals and expectations of strong corporate earnings trajectory, Indian markets continue to outperform both developed and emerging market peers. Additionally, domestic retail investors have supported the markets via infusion of nearly 15000 crore monthly in form of SIP towards equity mutual funds. Revival of monsoon towards end of the September has raised hopes of a good upcoming Rabi season and improvement in rural consumption. Capex situation continues to be strong as indicated by order inflow for capital goods companies. While near term volatility in equity markets is possible due to global cues, Indian markets are likely to yield robust returns in medium term. We like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex cycle.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of August global markets showed a reversal from July month with most major markets ending in red. The decline was caused by worries over renewed weakness in the Chinese real estate sector and US Fed's stance of continued tight monetary policy. Minutes from July’s US Fed meeting suggested that most members are in favour of a 25 basis rate hike, while a few reckon that there should be no more hike. S&P500 index posted a loss of 1.6% during month of August. Hong Kong markets declined by 8.5% while China posted a loss of 5.2%. Nifty50 Index posted a loss of 2.5% during the month on the back of 15-month high CPI Inflation and a weak monsoon. Mid-cap and small-cap indices outperformed posting positive returns of 3.7% and 4.6% respectively. Among the sectors, IT Services (2%), Transportation (2%) and Retail (3%) did well. India's July CPI inflation went up to 7.4% from 4.8% in June, due to rising food prices. June IIP growth was 3.7% vs 5.3 % in May. FIIs bought net USD 1.2 bn worth of Indian equities while DIIs sold USD 3 bn during the month.
Market Outlook
While inflation trajectory is moving down in most of the developed markets, concerns over growth has emanated due to high interest rate environment. Additionally, economic recovery in China has been slower than expected. Amidst this, India has witnessed constant inflow from FIIs over last few months dominated by ETF Flows on improving macro fundamentals. India continues to have a robust growth outlook for FY24 with estimate of nearly 6.5% by RBI which is likely to be the best among major economies. Domestic demand scenario looks robust as seen from high frequency data points like growth in personal loan, credit card spending, automobile sales and passenger data for aviation sector etc. Consumption is likely to get a further boost amidst festive season spending. Below normal monsoon and its impact on rural economy remains a key concern in near term. We stay positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of July global markets continued their positive trend with most major markets ending in green. The gains were supported by lower inflation in several developed markets, including the US. US Fed increased rates by 25bps in its meeting in July which could possibly be the final hike in this cycle giving comfort to the market participants. S&P500 index posted a gain of 3% while Russia and Hong Kong were the leading markets with 7.4% and 6.1% gains respectively during the month. Nifty50 Index posted a gain of 2.9% in July with Mid-cap and small-cap indices outperformed posting returns of 5.5% and 8% respectively. Among the sectors, Utilities (10%), Oil and Gas (9%) and Pharma (9%) were top performers. IMF raised India's FY2024 GDP forecast by 20 bps to 6.1%. India's June CPI inflation went up to 4.81% from 4.31% in May, due to rising food prices. May IIP growth was 5.2% vs 4.5 % in April. FIIs bought net USD 3.3 bn worth of Indian equities with continued positive stance towards India while DIIs sold USD 325 mn during the month.
Market Outlook
As the rate hike cycle in USA seems to have peaked, the near term outlook for global markets and especially for emerging markets remains positive. India has witnessed constant inflow from FIIs over last few months dominated by ETF Flows on improving macro fundamentals. India continues to have a robust growth outlook for FY24 with estimate of nearly 6.5% by RBI which is likely to be the best among major economies. Domestic demand scenario looks robust as seen from high frequency data points like growth in personal loan, credit card spending, automobile sales and passenger data for aviation sector etc. Consumption is likely to get a further boost as rural economy is expected to pick up during second half of the year amidst festive season. With monsoon rainfall near normal so far, fear of any large impact of El Nino has receded. We remain positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of June most global markets ended positive led by the United States. US Fed paused interest rate hike in June which lifted sentiments of global markets. S&P500 index posted a gain of 6.5% while Brazil and Japan were the leading markets with 9.4% and 7.5% gains respectively. Nifty50 Index showed a gain of 3.5% in June with Mid-cap and small-cap indices outperforming with returns of 5.9% and 6.6% respectively. Almost all the sectors except Consumer staples, Banks and IT Services outperformed Nifty 50. Capital Goods and chemicals were the best performers posting a gain of 5% each. India's May CPI inflation moderated to 4.25% from 4.7% in April, primarily due to favourable base effects and continued softening in commodity prices. April IIP growth was 4.2% vs 1.7% in March. FIIs bought net USD 5.1 bn worth of Indian equities, while DIIs bought USD 540 mn during the month.
Market Outlook
As the rate hike cycle in USA seems to have peaked, the near term outlook for global markets and especially for emerging markets remains positive. India has witnessed constant inflow from FIIs over last few months, dominated by ETF Flows on improving macro fundamentals. India continues to have a robust growth outlook for FY24 with estimate of nearly 6% growth which is likely to be the best among major economies. Domestic demand scenario looks good as seen from high frequency data points like growth in personal loan, credit card spending, automobile sales and passenger data for aviation sector etc. Consumption is likely to get a further boost as rural economy is expected to pick up during second half of the year. A strong impact of El-Nino on later part of monsoon remains a key risk for markets in near term. We remain positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of May, the most global markets ended negative or neutral except the likes of Japan, Brazil and Taiwan. However, there was a marked difference between sectors, as enthusiasm over AI (Artificial Intelligence) boosted technology stocks. S&P 500 Index remained neutral posting a gain of mere 0.1% as the looming prospect of a government default made investors jittery. Hong Kong was the weakest market in May, closely followed by China, as investor optimism seen earlier in the year following the post-Covid-19 reopening faded due to disappointing economic data and weakening demand. Indian markets outperformed by ending on a positive note. The Nifty50 Index showed a gain of 2.6% in May while mid-cap and small-cap indices posted a return of 6.2% and 5.1% respectively. All the sectors except Oil & Gas and Metals outperformed Nifty50 Index. Auto and Real Estate were the best performers. The US Fed raised interest rates by another 25 bps and hinted at a pause in the rate hike cycle going ahead. India's April CPI inflation moderated to 4.7% from 5.66% in March, primarily due to favorable base effects and continued softening in commodity prices. March IIP was 1.12% vs 5.8% in February. FIIs bought net USD 4.2 bn worth of Indian equities, while DIIs bought USD 406 mn during the month.
Market Outlook
While global growth prospects for 2023 were improving at the beginning of the year, the banking crisis in the US in March and lagged impact of rate hikes muted the growth estimates. Now, as the rate hike cycle in the US is likely to have ended, the near term outlook for the equity market seems to be positive. India, with an estimate of nearly 6% GDP growth in FY 2023-24 is likely to be among the fastest growing major economies. Corporate earnings should also be on a strong wicket since fall in commodity prices will reflect in margin improvement for consumer companies. India is likely to be a key beneficiary of resumption of FII inflows into emerging markets going ahead. We remain positive on Indian equities over the medium term owing to structural levers of the Indian economy. We like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of March most global markets ended positive except the likes of UK, Brazil and Malaysia. S&P 500 Index registered a gain of 3.5% in spite of the problem in US regional banks as Central Bank stepped in quite fast to provide liquidity to the banking system. Equity markets in China ended flattish having done relatively well last month on the back of reopening of economy and Government focus on prioritizing growth. Indian markets also ended flat as as concerns over Adani group subsided after investment by a leading global fund. Nifty50 Index showed a gain of 0.3% in March while mid-cap and small-cap indices were down 0.4% and 1.4% respectively. Power, Oil and Gas and FMCG outperformed where as Auto, IT and real estate underperformed. US Fed raised interest rates by another 25 bps in March to 4.75%-5%, the highest level since September 2007. India's CPI inflation in February moderated marginally to 6.44% (January: 6.52%), led mainly by a sequential fall in food prices. WPI inflation in February moderated to 3.9% from 4.7% in January. FIIs bought net USD 250mn worth of Indian equities, while DIIs bought USD 3.8bn during the month.
Market Outlook
While global growth prospects for 2023 were improving at the beginning of the year, banking crisis in US and Europe in March has muted the growth estimates again. However, India continues to have a robust growth outlook for FY24 with estimate of nearly 6% growth which is likely to be the best among major economies. Valuation premium of Indian market vs other emerging markets has come down to reasonable levels. After correction in our market due to adverse research report on Adani Group, things seem to have settled down with investment in Adani group companies by GQG Partners. Possibility of El-Nino impacting monsoon this year adversely remain the key risk for Indian markets as rural economy has not yet recovered to pre COVID levels. Also, any global risk off situation due to spread of banking crisis in USA could induce volatility in the markets. We remain positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
During the month of February most global markets ended negative on the back of declining hopes of pause in rise of interest rate in near future. US CPI climbed 0.5% Month on Month in January after a 0.1% increase in December. Minutes of the recent meetings of the the US Fed suggest that the Central Bank is willing to increase the interest rates further as inflation remains a concern. Equity markets in China have done relatively well on the back of reopening of economy and Government focus on prioritizing growth. Taking global cues Indian markets ended in negative during the month but outperformed some emerging and developed markets. Like previous month, premium valuation of India led to FII flows moving towards China. The Nifty50 Index declined 2% in February while mid-cap and small-cap indices were down 2% and 3.1% respectively. Power, Metals and Oil and Gas underperformed while FMCG and Capital Goods outperformed. FIIs sold net USD 112mn worth of Indian equities, while DIIs bought USD 2.3 bn during the month.
Market Outlook
With improving growth prospects, upgrade in GDP estimates for 2023 is likely for many developed economies. Strong growth parameters are expected to emerge from China post COVID reopening with government target of 5% growth in 2023. Domestically, India’s expected growth rate of 5.5-6% in FY24 is likely to be the best among major economies. Also, corporate earnings have been positive with Nifty50 companies expected to post double digit growth in FY24. With the recent underperformance of Indian markets against emerging markets, valuation premium of India has come down to reasonable levels. After correction in our market due to adverse report on a large conglomerate, the investor sentiments are expected to improve as the conglomerate has raised nearly $2bn from secondary sale to repay loans linked to pledged shares. This could lead to improved performance of Indian markets combined with decreasing outflow of capital from India to China. Possibility of El-Nino impacting monsoon this year adversely remain the key risk for Indian markets as rural economy has not yet recovered to pre COVID levels. Also, any fallout of high interest rate on liquidity levels of US banks could lead to a risk off scenario globally. We remain positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.
Happy Investing!!
Investments in securities market are subject to market risks. Read all the related documents carefully before investing. This content is for general information and is not investment advice. Past market movements do not indicate future performance. Please consult your financial advisor.
