Bulls on Pause — Is This the Calm Before the Storm?
Grab your chai ☕︎! Let's dive into the weekly buzz of the Indian stock market.
Hello🙋♂️!
We are here with the 79th edition of ‘Sharpe Insights’.
Not much action to report this week — just as we anticipated in the last edition, the market spent most of it consolidating.
While the markets stayed quiet, we didn’t. With the Q4 results season wrapping up, we dug into the numbers to uncover a few strong performers that stood out with solid earnings. Here is our analysis.
Now, let’s look at how the market moved during the week.
Global Macro Factors🌍
The global macro factors were neutral this week, but with a negative bias. Crude was down by 1.56% this week. It is now trading below the $65 mark. Gold rallied by a whopping 5.52% this week. It is now trading above the $3350 mark.
The dollar index was down this week. The rupee was up as USD INR fell by another 0.41% during the week. It is trading at 85.15. The US 10-year Treasury Yield was marginally up. It is now at 4.50% vs 4.44% last week.
The S&P 500 was down by a solid 2.61%. It is now trading near the 5800 level! India’s foreign exchange reserves declined by 4.88 billion dollars, reaching 685.7 billion dollars in the week ending 16th May, the data from the Reserve Bank of India showed.
Market Performance📈
This week, we saw a consolidation in the market after the strong bounceback of last week. Most of the broader market indices ended the week in the red. But this marginal fall was expected as we had a wild upmove in the previous week.
The Nifty 50 was down by 0.67%. The Nifty 100 and Nifty 500 also fell marginally by 0.55% and 0.39% respectively. While the Nifty Midcap 100 was down by 0.65%, the Nifty Smallcap 100 was the top gainer and ended the week with a gain of 0.47%.
Now, let’s talk about the stocks. BEL was the top gainer among the Nifty 50, and DLF was the top gainer among Nifty 100 names with a gain of 8.46%. Honsa Consumer was the top gainer among Nifty 500 companies with a weekly gain of 26.17%, and Solar Ind. topped the chart among Nifty Midcap 100 stocks, with weekly gains of 9.33%. Tata Tele Maharashtra was the top gainer in the Nifty Smallcap 100 names.
Sector Analysis📊
This week, we saw a consolidation at the sectoral level as well. Most of the indices ended the week in the flat to negative territory.
Realty, PSU Banks, and Metal companies outperformed during the week while Pharma, IT, Auto, and Consumption stocks struggled.
Now, let’s discuss market breadth. We gauge it by looking at stocks trading above their 50-day EMA. The number bounced strongly this week. It is at 83.60% vs 87% last week. So, there was a marginal fall this week. This means that stocks are holding their ground for now. This is a good sign as a one-directional move can’t sustain without a pause.
Sectors To Watch
Many premium members are using RRG charts on sharpely. It helps you to find strong sectors and stocks based on relative strength and momentum. You can check it out here. Now, let’s see what it says this week.
Similar to last week, we can see that many sectors are in the improving quadrants (check the purple ones in the table). But there are some interesting names on the strong side of the chart. Keep an eye on Banking and Finance, PSUs and the Oil and Gas space. They are showing high relative strength at the moment.
On the RRG chart, you can also compare stocks from these sectors by just selecting the index to find the strong names! Finding the right sectors and stocks can’t be easier than this! So check this tool out now!
That’s it for this week, folks. See you next Sunday!