Nifty Hits All Time High!
Hello??♂?!
We are here with the 21st edition of ‘Sharpe Insights’. As always we are going to keep this around 4-5 minutes! Don’t forget to answer the question at the end to win a 1-month subscription to sharpely Pro. Let’s dive in!
This week, the market hit the new ATH with a shakeout on Thursday. Also, the result season has come to an end. We have seen some blockbuster numbers from companies operating in BFSI, Realty and Capital Goods space. On the other hand, we saw weak numbers coming from some of the FMCG and chemical companies. Overall it was a decent earnings season with no major negative surprises.
Global Macro Factors??
Global macro factors were positive this week. Crude oil slipped by 2% during the week and is now trading below the $82 mark. Gold moved up by 1.14% and is now firmly above the $2000 mark again. The US 10-year Treasury Yield also came down a bit during the week. It is 4.248% at the time of writing this. It made a high of 4.35% during the week. Despite a slight cool-off during the week, the 10-year yield is still above the 4% mark.
The dollar index was down by 0.30% and the USD INR was also down by 0.21%. The USD INR is trading below the 83 level for the second week in a row. The S&P 500 was up by a solid 2.28% during the week. NVIDIA announced its quarterly earnings on 21st Feb and the result was super strong.
On the domestic front, India's forex reserves fell to a two-month low of $616.10 billion on Feb 16, declining for two consecutive weeks. This can be a reason for the strong performance of the rupee during these two weeks.
Market Performance??
This week we saw continued volatility in the market. There was a minor shakeout on Thursday. But the market recovered in the second half of Thursday and made a new ATH on Friday. We saw weak performance in the mid and small-cap space as profit booking continued. But large companies continued to gain.
Market breadth was flat during the week. As of 23 Feb 2024, 79.2% of Nifty 500 stocks are above their 200 Day EMA. This number was 78.8% on 16th Feb. If this number cools down to 70 in the coming days, then we can see some good buying opportunities in the market.
Again, larger companies won the battle this week as Nifty 100 was the top gainer with healthy gains of 0.86%. Nifty 50 was the close second with weekly gains of 0.78%. Nifty 500 (up 0.74%) and Nifty Midcap 100 (up 0.30%) also closed in green. Nifty small-cap index closed the week in red. The Small-Cap index has been the best performer in the past year as it has moved up by more than 75%. And, it has also been the best performer in the monthly timeframe. So, the profit booking is on the expected lines.
If we talk about stocks, M&M was the top gainer among Nifty 50 companies again as it gained 5.14% this week after the weekly gains of 11.64% in the last week. On the other hand, Hero Moto was the top loser with a weekly down move of 7.66%. ABB and Tata Investment Corp were the top winners in the Nifty 100 and Nifty 500 space with weekly gains of 19.18% and 21.90% respectively. And, we finally saw a trend reversal in PAYTM. After making an all-time low last week, this week the stock was mostly locked in the upper circuit. The company was the top gainer in the Midcap 100 space with weekly gains of 16.99%.
Sector Analysis??
Many indexes end in the positive territory on the sectoral front. There was some weakness in the IT companies and we also saw profit booking in PSU companies along with PSU banks. The energy sector was also under pressure. But apart from these sectors, we saw some strength at the sectoral level. We saw eight sectors closing with gains of nearly 1% or more.
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Realty shares again saw solid buying interest and the sector was the top gainer with weekly gains of 4.08%. We have to note that it is still the best-performing sector in the yearly timeframe. We have seen some super quarterly numbers from real estate companies and this space is seeing tailwinds with upcycle in the realty market.
Apart from that, we saw some strength in FMCG, Consumption, Auto and pharma space. There is one interesting observation. Some of the biggest winning sectors of the past few months are now seeing profit booking. And some of the laggards are now seeing a decent buying interest. These include sectors like pharma, chemical and consumption. The next winners may emerge from these sectors.
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What we are reading this week
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) A listed bottler of the PEPSICO serves its beverages to almost 1/6th of the world's population. The stock has also been a multi-bagger in the past couple of years. What is the name of the company? (Hint: It has been a top gainer among Nifty FMCG companies in the last week.)
Answer the question by replying to [email protected]
Last week’s answer: Axis Bank
Last week’s winner: Vijaya Baskaran
That’s it, folks. See you next Sunday!