Sharpe Insights | Market marches on!
Grab your chai ☕︎! Let's dive into the weekly buzz of the Indian stock market.
Hello🙋♂️!
We are here with the 31st edition of ‘Sharpe Insights’.
Don’t forget to answer the question at the end to win a 1-month subscription to sharpely Pro. Let’s dive in!
After last week's strong rebound, this week the market marched on with higher volatility. The result season is also going in full swing! In the coming week, companies like Gujarat Fluorochemicals, Marico, Max Financial Services, Dr Reddy's Laboratories, Tata Power, Westlife Foodworld and many more will announce their results. You can find the complete list in our event calendar here.
Global Macro Factors🌍
The global macro factors were positive this week. Crude oil dipped by more than 6% in the week. It is now trading at $82.32 vs last week’s price of $89.36. Gold also continued to cool off after a solid rally in the past few weeks. It reached $2310.10 after touching the $2349.60 mark last week.
The dollar index was also down marginally and came below the 106 mark. The rupee was flat as USD INR gained 0.03% during the week. And another key positive was the US 10-year Treasury Yield. It came down this week after three weeks of continuous up move. It is now at 4.49% vs 4.66% last week. But even after this week’s fall, the yield remained at the elevated level of 4.5%.
The S&P 500 gained 0.23% this week. It is now trading strongly above the 5100 level.
On the domestic front, the General Election 2024 has started. The third phase of voting will be held on 7th May. India's forex reserves declined by $2.41 bn to $637.92 bn as of April 26, the latest data published by the Reserve Bank of India showed on Friday. This is the third consecutive week of decline.
Market Performance📈
This week, we had four trading days due to the holiday of Maharashtra Day on 1st May. The market was up during the first three days but fell sharply on Friday. But it is still strongly above the 50-day EMA mark after the strong bounce back of last week. It seems like 22780-22800 is a strong short-term resistance.
The Nifty 50 was up by 0.25%. The Nifty 100 and Nifty 500 were also up by 0.65% and 0.58% respectively. The advance-decline numbers were not as strong as last week. It seemed like there was a bit of exhaustion in the broader market. So, if you are heavily invested in any overpriced names, stay cautious.
While the Nifty Midcap 100 moved up by 0.61%, the Nifty Smallcap 100 was down by 0.26%.
If we talk about stocks that climbed up during the week, M&M was the top gainer among Nifty 50 stocks with a weekly up move of 7.25%. REC Limited was the top gainer among Nifty 100 and Nifty 500 companies as it closed the week with a gain of 22.3%. It reported very strong numbers during the week and the street cheered the strong performance. Supreme Industries and JBM Auto were the top gainers in the midcap and small-cap space respectively.
Sector Analysis📊
This week, there was fatigue on the sectoral level. While most of the sectors ended in green, some ended in red. Many of the names could not hold onto the gains they made during the week. Media stocks were under pressure followed by the IT stocks. There is a broader weakness in the IT space as almost all major IT companies reported weak numbers with weak forward-looking estimates.
If we look at the positive side, banking and finance stocks did well this week. Bank Nifty and Nifty Finance were up by 1.5% and 2.08% respectively. PSU banks also showed strength as the index moved up by more than 2%. Nifty PSE was the top gainer on the sectoral level as it climbed up by almost 4% in the week. Some of the PSU companies are reporting solid numbers and they are helping the index climb to new highs!
But valuations are not favourable in many of the names. So, if you are riding the momentum, have a proper exit system in place.
The market continued to stay at a healthy level. We gauge it by stocks trading above their 50-day EMA. The number came down to 71.5% from 74.3% last week. We consider anything above 70 and less than 90 to be healthy.
What we are reading this week🙇♂️
Case Study on IRFC by Prof. Sanjay Bakshi. Read it here.
Risk Seeking vs. Mitigating. Read it here.
FOMO: The Worst Financial Trait by Morgan Housel. Read it here.
Quiz🏆
Every week we ask an interesting question. Answer the question and get a chance to win a 1-month subscription to sharpely Pro!
Q) Recently Reliance launched a consumer electronics and home appliances brand. What is the name of it?
Answer the question by replying to hello@sharpely.in
Last week’s answer: Sterling & Wilson Renewable Energy Ltd
Last week’s winner: Sanil Sukumaran
That’s it, folks. See you next Sunday!