After 75k, will the Sensex Conquer the 1 Lakh Peak? A Deep Dive into the Market’s Ascent| Weekly Update April 12th
Hello Readers!
Temperatures are on the rise and not just weather-wise! The talk of the town is whether the Sensex and Gold will soon see the 1 lakh peak, after they crossed 75k and 72.6 respectively, this week. But before we get to the future, let’s take a quick look at the past…week 🙂
🧾In this Article
Weekly Market Wrap-up
Quick bites
Stocks in News
Sustainability Corner
Cover story: After 75k, will the Sensex Conquer the 1 Lakh Peak? A Deep Dive into the Market’s Ascent
Key events
📈 Weekly Market Wrap-up
This week, India’s benchmark indices, the Sensex and Nifty, ended flat despite a three-week winning streak. Profit booking and weakness in heavyweight stocks like HDFC Bank (-1.06%) and Larsen & Toubro (-3.6%) dragged the market lower.
The Sensex closed at 74,244.90, shedding 793.25 points or 1.06%, while the Nifty ended down 234.40 points or 1.03% at 22,519.40.
Winners and Losers:
This week saw a mixed bag of performers across sectors. Here’s a look at some of the top gainers and losers:
Top Winners:
- Eicher Motors (6.8%): The two-wheeler manufacturer surged as investors remain optimistic about the demand outlook in the domestic market.
- Hindalco Industries (4.85%): The metal company benefited from rising metal prices globally.
- M&M (2.83%): The Mahindra group company gained momentum, likely due to positive sentiment in the auto sector.
- Bharti Airtel (2.82%): The telecom giant continued its upward trajectory, reflecting investor confidence in the sector’s growth potential.
- Tata Consumer (2.61%): The FMCG company rose on the back of positive news related to its product launches.
Top Losers:
- Sun Pharma Industries (-4.32%): The pharmaceutical company witnessed a correction after a strong run-up in recent weeks.
- Cipla (-3.61%): Similar to Sun Pharma, Cipla also faced selling pressure after a period of gains.
- Titan Company (-3.6%): The jewelry maker corrected, possibly due to profit booking by investors.
- Wipro (-2.95%): The IT major fell as broader weakness in the IT sector impacted its stock price.
- Adani Ports (-2.32%): The shipping company witnessed profit booking after recent gains.
Sector Spotlight:
Most sectors ended the week on a negative note. The IT sector, led by companies like Wipro and Infosys, witnessed some selling pressure, resulting in a 0.78% decline. Similarly, the FMCG sector saw profit booking, with Hindustan Unilever and Nestle India ending slightly lower by around 0.45%. Consumer Durables was the week’s biggest loser, dropping 1.00% as companies like Titan and Havells India faced selling pressure. The Healthcare sector also experienced a decline of 0.80%, with pharmaceutical giants like Sun Pharma and Cipla leading the downward trend.
Market Breadth:
The broader markets also ended lower, indicating selling pressure across the board. The S&P BSE Midcap index and the S&P BSE Smallcap index closed down 0.49% and 0.60% respectively.
On the BSE, all 20 sectors ended lower. Market breadth also favored sellers, with around 2,365 stocks declining compared to 1,475 that advanced.
Rupee Report:
The Indian rupee weakened against the US dollar this week, closing at 83.42, a decline of 23 paise compared to the previous week’s closing of 83.19.
Gold Surges:
Gold prices surged this week, reaching a new all-time high of $2,400 per ounce on Friday, April 12th. This represents a remarkable increase of approximately 17.07% compared to the previous week’s closing price of $2,050 per ounce. Geopolitical tensions in the Middle East and investor demand for safe-haven assets are likely contributing to the rally. Gold’s traditional role as a hedge against inflation and market volatility also adds to its appeal.
Global Gossip:
Global markets closed out the week with mixed results. After a strong run, the US markets took a breather. The S&P 500 dipped 0.35%, closing at [latest S&P 500 closing value]. The Dow Jones Industrial Average followed suit, experiencing a slightly steeper decline of 0.72%, ending the week at 37,983.24. This represents a drop of 1.24% from its opening price of 38,319.14.
European markets displayed more stability. The pan-European STOXX 600 Index edged up by a modest 1.1%, suggesting cautious optimism.
Asian markets faced headwinds from geopolitical tensions and inflation concerns. Major indexes like China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index experienced slight declines, down 0.5% and 0.8%, respectively. Notably, Japan’s Nikkei 225 Index defied the trend, managing a small gain of 0.23%, potentially due to continued confidence in the Bank of Japan’s monetary policy.
Bottom Line
This week, profit booking and weakness in heavyweight stocks led to a decline in the benchmark indices. Despite the correction, the broader market remained relatively flat overall. Geopolitical tensions continued to influence the price of gold, which reached new highs. With the earnings season approaching, investors will be closely watching company results and future guidance to gauge the market’s direction in the coming weeks.
🍟 Quick Bites
- 🦄 India’s unicorn count dropped to 67 from 68, positioning it as the world’s third-largest unicorn hub, trailing China and the USA.
- 🛢️ India’s steel imports surged by 38% in FY 2024, reaching 8.32 million tonnes, overshadowing exports at 7.48 million tonnes.
- 💼 CEOs’ average salaries in India spiked by 40% to ₹13.8 cr in 2024, as per Deloitte.
- 🚖 Ola Cabs is reportedly planning to withdraw from its international markets, including the UK, Australia, and New Zealand.
- 💹 BSE-listed companies collectively exceeded a market cap of ₹400 lakh cr for the first time.
- 📱 In February 2024, Jio gained 36 lakh new telecom subscribers, while Airtel added 15.30 lakh, and Vodafone-Idea (Vi) lost 10.24 lakh customers.
📰 Stocks in News
- 🛫 InterGlobe (IndiGo) surpassed Southwest Airlines, becoming the world’s 3rd most valuable airline.
- 💊 Dr Reddy’s introduced a drug-free migraine management device in Germany.
- 🤝 PB Fintech revealed a partnership with ICICI Lombard.
- 🚗 Maruti Suzuki hiked Swift car prices by up to ₹25,000 and Grand Vitara Sigma by ₹19,000.
- 🏦 HDFC Bank opened a branch on Lakshadweep’s Kavaratti island.
- 📉 One 97 Comm (Paytm) saw the resignation of Paytm Payments Bank CEO Surinder Chawla.
- 🏡 Godrej Properties witnessed an 84% surge in sales for FY 2024.
- 🏭 Maruti Suzuki boosted Manesar plant’s production capacity by 1 lakh units per year.
- 🔍 Dixon is eyeing a majority stake acquisition in Ismartu India.
- 🚗 Tata Motors’ subsidiary ‘Jaguar Land Rover’ marked a 25% YoY sales increase for FY 2024.
- 📉 ZEE plans a 15% reduction in its workforce.
- 🏡 Godrej Properties sold new homes worth over ₹3,000 cr in a Gurugram project.
- 🏭 JSW Steel achieved its highest-ever crude steel production (26.43 million tonne) in FY 2024.
- ❄️ Voltas became the first AC company to sell 20 lakh units in a financial year.
- 💉 Gland Pharma received US FDA approval for its breast cancer treatment injection.
- 💵 REC approved loans worth ₹3.59 lakh cr in FY 2024, a 33.66% YoY increase.
🌱 Sustainability Corner
- ⚡ Adani Total inked a deal with MG Motors to establish EV charging stations at MG dealerships.
- 🔋 Exide partnered with Hyundai and Kia for India-made EV batteries.
- 🚗 Kia announces three new EVs including the Carens EV, alongside more hybrids and a focus on affordability.
- 🇮🇳 India’s new EV policy lets states offer incentives, potentially benefiting Tesla’s right-hand drive cars coming to India this year.
- 📦 Delivery fleet EV manager Zypp Electric seeks $40 million investment, reaching a valuation of $300-350 million.
- 🇨🇳 Chinese automakers’ record ship orders for EVs point to China becoming a top EV exporter by 2028.
- 🔌 Ford offers a $1,500 EV discount to Tesla owners or leasers switching brands.
- ⚡ Terra Charge launches two new Indian-made EV chargers: one for fleets, one for premium locations.
After 75k, will the Sensex Conquer the 1 Lakh Peak? A Deep Dive into the Market’s Ascent
The past week in Indian stock markets has been a fascinating display of conflicting forces. The Sensex, a key benchmark index, has tantalized investors with a close brush with the much-anticipated 75,000 mark, only to experience a slight retreat. This has ignited a critical question: can the Sensex realistically scale the coveted 1 lakh (100,000) peak?
Unpacking the Market’s Mood: A Tug-of-War Between Optimism and Caution
Predicting the market’s future trajectory is notoriously akin to forecasting the weather – a complex task with numerous intricate factors at play. However, by dissecting recent events, we can glean valuable insights. Positive triggers like robust earnings reports from Reliance Industries (up 11.16% as of April 11, 2024) and Infosys (up 3.2% as of April 11, 2024) instilled confidence in investors. Additionally, the anticipation surrounding the upcoming quarterly results season added a layer of optimism, hinting at further potential growth.
However, the market sentiment is not without its counterweights. Global headwinds like the ongoing war in Ukraine continue to cast a long shadow. Disruptions in supply chains and surging energy prices threaten not only businesses but also strain household budgets, impacting disposable income and investment decisions. Rising inflation concerns further complicate the picture. If these inflationary pressures persist, central banks might raise interest rates, potentially dampening investor enthusiasm by increasing borrowing costs. As a result, even though domestic markets witnessed some upward movement, the journey wasn’t entirely smooth sailing.
Reaching 1 Lakh: A Climb Fraught with Challenges
The Sensex breaching the 75,000 mark is undoubtedly a significant milestone. However, reaching the coveted 1 lakh mark requires a perfect alignment of several factors. Let’s delve deeper into the key hurdles that lie on the path to this ambitious peak:
- Global Uncertainty: The ongoing war in Ukraine remains a major concern. The disruption of supply chains and the inflation of energy prices not only impact businesses but also put a strain on individual wallets, potentially reducing investment capital.
- Rising Inflation: Inflationary pressures remain a significant concern for the Indian economy. If these pressures persist, central banks might raise interest rates, potentially dampening investor sentiment and reducing the attractiveness of the stock market compared to other asset classes.
- Geopolitical Tensions: Geopolitical tensions across the globe can lead to market volatility and risk aversion among investors. Heightened geopolitical risks can cause investors to pull their money out of the market, leading to sharp declines.
Reasons for Hope: The Indian Growth Engine Churns On
Despite these challenges, there are reasons to be cautiously optimistic about the Indian market’s long-term prospects. Here’s what’s working in India’s favor:
- Strong Economic Fundamentals: Compared to many other countries, the Indian economy is on a relatively strong footing, with a robust domestic market and a growing middle class. This strong foundation provides a platform for potential future growth.
- Government Initiatives: The government’s focus on infrastructure spending and economic reforms could continue to propel economic growth. Increased infrastructure spending can lead to improved connectivity and a more efficient business environment, while economic reforms can attract foreign investment and stimulate domestic businesses.
- Favorable Monsoon: A healthy monsoon season is crucial for India’s agricultural sector, which forms a significant portion of the economy. A good monsoon can lead to a bountiful harvest, boosting rural incomes and overall economic activity.
Navigating a Volatile Market: Strategies for Long-Term Success
If you’re a long-term investor, there’s no need to panic. Here are some key strategies to help you navigate a market with ups and downs:
- Build a Diversified Portfolio: Don’t put all your eggs in one basket. Spreading your investments across various sectors and asset classes, such as equities, bonds, and real estate, mitigates risk by ensuring your portfolio is not overly exposed to any single sector or economic downturn.
- Stay Informed: Knowledge is power in the market. Continuously update yourself on economic developments, company performance, and market trends. This knowledge will empower you to make informed investment decisions.
- Embrace the Long Haul: The stock market is best suited for long-term wealth creation. Don’t get swayed by short-term fluctuations in the market. Maintain a disciplined and patient approach, focusing on your long-term investment goals.
- Seek Professional Guidance: Consider consulting a registered financial advisor who can create a personalized investment plan tailored to your risk tolerance and financial goals. A financial advisor can provide expert guidance and help you navigate the complexities of the market.
In conclusion, the Sensex reaching 1 lakh is a possibility, but it’s not a guaranteed outcome. Staying informed about market trends and economic developments empowers you to make sound investment decisions. By adopting a long-term perspective, diversifying your portfolio, and potentially seeking professional guidance, you can position yourself to benefit from the potential growth of the Indian stock market and achieve your financial goals. Remember, the market may be unpredictable, but with knowledge and discipline, you can successfully navigate its twists and turns. Ultimately, conquering the 1 lakh peak requires a confluence of favorable domestic and global factors. However, by remaining informed and invested for the long term, you can ensure your portfolio is well-positioned to capitalize on the potential opportunities that lie ahead.
Upcoming key financial events for the week:
| Date | Event |
| 15-Apr-24 | – USD Empire State Manufacturing Index |
| – USD Core Retail Sales m/m | |
| – INR WPI Inflation (YoY) (Mar) | |
| 16-Apr-24 | – GBP Claimant Count Change |
| 17-Apr-24 | – GBP CPI y/y |
| 18-Apr-24 | – USD Unemployment Claims |
| 19-Apr-24 | – GBP Retail Sales m/m |
| 20-Apr-24 | – USD Treasury Currency Report |
10-Apr-24 | – USD Core CPI m/m | | | – USD CPI y/y | | | – USD FOMC Meeting Minutes | |———–|————————————| | 11-Apr-24 | – EUR Monetary Policy Statement | | | – USD Core PPI m/m | | | – USD Unemployment Claims | | | – USD 30-y Bond Auction | | | – INR CPI (YoY) (Mar) | |———–|————————————| | 12-Apr-24 | – GBP GDP m/m | | | – USD Prelim UoM Consumer Sentiment
