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Results & Budget Anticipation Turn Markets Volatile | Weekly Update July 12

Results & Budget Anticipation Turn Markets Volatile | Weekly Update July 12

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Results & Budget Anticipation turns Markets Volatile | Weekly Update July 13th  

Hello Readers!

Markets continued their upward trajectory for the sixth consecutive week, with Nifty and Sensex closing in green. But with the kickstart of the earnings season, and budget FY25 just around the corner, it seems volatility is setting in the Indian equity markets.  

Wondering why? Let’s explore these events and how to navigate them like a pro! But before we get into the ‘why’ and ‘how’, let’s look at the ‘what’ – with what happened in the markets over the past week!  

🧾In this Article

📈 Weekly Market Wrap-up

Good news from the stock market this week! Both Sensex and Nifty continued their northward journey and ended the week on a positive note. The Sensex climbed over 500 points, that’s a 0.65% increase, to close the week at 80,519.34. While Nifty ended at 24,502.15 gaining almost 180 points, or 0.73%. This upward trend could be due to a few things: maybe some companies released strong earnings reports, upcoming economic data releases, or global market cues. 

The BSE Mid-Cap index gained 0.15% to close at 47,508.26 while the BSE Smallcap index declined 0.26% to end at 54,013.25. 

The results reason has kicked off and so far 43 companies have declared their results, of which 24 companies have posted positive growth while 19 negative. 

It was a volatile week for the markets – the Nifty and Sensex ended three out of five trading sessions in red, however managed to end the week with gains. Budget and results season were the key reasons for this volatility, which is here to stay. 

Sector Spotlight

Among the sectoral indices, the IT sector reigned supreme this week. The BSE IT clocked a weekly gain of 4.32%. BSE FMCG followed closely behind, registering a modest increase of 0.24%. However, the remaining sectors experienced slight downturns. BSE Capital Goods witnessed the steepest decline at 0.57%, followed by BSE Consumer Durables with a 0.49% dip, and Healthcare (BSE HC) closing out the week down 0.11%. 

Nifty 100 top gainers and losers 

Top Gainers:

  • IRFC: ₹216.4 (▲+14.92%) 
  • REC Ltd: ₹636.3 (▲+9.64%) 
  • Zomato Ltd: ₹223.15 (▲+7.54%) 
  • ONGC: ₹306.85 (▲+6.47%) 
  • ITC: ₹459 (▲+5.85%) 

Top Losers:

  • Bank Of Baroda: ₹251 (▼-8.29%) 
  • M&M: ₹2,702 (▼-6.26%) 
  • A B B: ₹8,196 (▼-5.59% 
  • Vedanta: ₹449.15 (▼-5.12%) 
  • Canara Bank: ₹112.8 (▼-4.24%) 

FPI and DII Activity: 

Foreign institutional investors (FIIs) were net buyers in the Indian stock market, pumping in a total of ₹3,843.99 crore into Indian equities during the week. Domestic institutional investors (DIIs) were also net buyers, with a total net investment of ₹5,390.67 crore. 

Global Gossip:

This week, global stock markets showed some ups and downs. Leading the pack was Hong Kong’s Hang Seng, which surged an impressive 2.77%. The US markets also performed well, with the Dow Jones rising 1.59% and the Nasdaq gaining 0.25%. Europe followed suit, with Germany’s DAX climbing 1.48% and the UK’s FTSE index ticking up by 0.60%. However, not all markets were in the green. Japan’s Nikkei 225 closed the week just 0.68% higher than the last week. Overall, despite the mixed performance, the average change across these major indexes landed around a 1.13% increase for the week 

Rupee Report:

The Rupee ticked up on a weaker dollar. The rupee gained slightly on Friday, closing at 83.5350 per US dollar. This is a small increase from Thursday’s close (83.56). The US dollar’s overall weakness, triggered by inflation data suggesting a possible interest rate cut by the Federal Reserve, helped the rupee. However, importer demand for dollars capped further rupee gains. Overall, the rupee remained flat week-on-week. 

Gold Surges:

Great news for gold investors! The price is holding above $2,400 an ounce and is on track for a winning streak for the third week in a row. This is because investors are confident that the Federal Reserve will soon lower interest rates, which typically makes gold more attractive. 

On Friday, July 12th, gold was priced at $2,417.36 per ounce, marking a 1% increase for the week so far. It’s important to note that even though the price dipped slightly on Friday compared to the previous day, it still closed the week at a one-month high. 

🍟 Quick Bites

  • 🍅 India’s retail inflation touched a 4-month high of 5.08% in June. Food inflation rose to 9.36%. Vegetable inflation was 29.32%  
  • 🚆 Indian Railways will manufacture 10,000 non-AC coaches over the next 2 financial years to increase the number of non-AC coaches by 22%.
  • 💰 India’s foreign exchange reserves rose by $5.16 billion to hit a new all-time high of $657.16 billion in the week ended July 5, as per data from the Reserve Bank of India. 
  • 📶 Sales of telecom equipment under the PLI scheme have crossed ₹50,000 cr. In this, exports were of around ₹10,500 cr. 
  • 🏞 Sales under India’s Khadi and Village Industries Commission stood at ₹1.5 lakh cr in the financial year 2024, up from (vs ₹1.3 lakh cr in 2022-23). 
  • 💵 Inflows into equity mutual funds rose 17% to ₹40,608 cr in June (vs ₹34,697 cr in May). Debt funds saw an outflow of ₹1.07 lakh cr. Maximum outflows were recorded in liquid funds.
  • 🚂 Eastern Railways earned over ₹953 cr of passenger revenue in the April-June quarter, a 9.97% growth year-on-year. 
  • 💼 Assets under management for mutual funds in India stood at an all-time high of ₹61.16 lakh cr in June (vs ₹58.91 lakh cr in May): AMFI. 
  • 📊 India’s employment growth rate stood at 6% (provisional data) in the financial year 2023-24 (vs 3.2% in 2022-23): RBI. 
  • ⛽ India’s fuel consumption rose by 2.6% year-on-year in June 2024: Oil Ministry. 
  • 📉 US records lowest inflation in 3 years. Unexpectedly dipping by 0.1% in June, US consumer prices mark their first decline since May 2020, fueling market expectations for a potential interest rate cut by the Federal Reserve in September. 
  • 📶 Quant Mutual Fund’s AUM at all time high of ₹94,000 crore, NAVs of most schemes hit record levels X` 

📰 Stocks in News

  • 💊 Zydus Lifesciences got US FDA nod for a heart disease treatment tablet. 
  • 🚗 Tata Motors’ Jaguar Land Rover sold 31% more vehicles at 1,371 units in Q1FY25. 
  •  🚗 Mercedes-Benz India recorded its highest-ever half-yearly sales. The company saw a 9% year-on-year growth in total sales (9,262 units) till June 2024. 
  • 🚇 Siemens with RVNL got a ₹766 cr contract to electrify Bengaluru Metro Phase 2.
  • 🚀 Bharat Electronics bagged a ₹230 cr export otder from Thales Reliance Defence Systems for parts of radar systems used in fighter jets.
  • ⚖️ Supreme Court gave interim relief to Adani Ports by staying land recovery order. 
  • 💼 Glenmark Pharma to sell its entire 7.85% stake in Glenmark Life Sciences.
  • 🏦 Yes Bank clarified reports of stake sale are incorrect.  
  • 🛳️ L&T bagged an order from Hindustan Shipyard to build parts of 2 Fleet Support Ships for the Indian Navy.  
  • 🚄 RVNL received a ₹202.87 cr order from South Eastern Railways for projects in Kharagpur division. 
  • 🍫 Nestle announced an interim dividend of ₹2.75 per share for 2024-25. Record date: July 16. 
  • Titan reported a 9% year-on-year business growth in Q1FY25. 
  • 🏦 Bank of India’s loans grew 17.25% YoY and deposits grew 9.91% YoY in Q1FY25. 
  • 🚢 Container Corporation‘s total volume handled increased 6% YoY in Q1FY25. 
  • 🌾 Adani Wilmar’s total sale volume rose 13% YoY and total sale value rose 11% YoY in Q1FY25. 
  • 💰 AU Small Finance Bank reports gross advances of ₹90,700 crore for Q1 FY25 deposits declined 0.4% QoQ and loans grew 4.9% QoQ in Q1FY25.  
  • 🏥 Apollo Hospitals to acquire an additional ₹103.20 cr stake in its subsidiary Apollo Health and Lifestyle. 
  • 🏢 DLF became the most valuable listed real estate company with a ₹2 lakh cr valuation. 
  • 🚂 RVNL received a ₹138 cr order from Central Railways for upgradation work in Nagpur division. 
  • 💸 Vedanta plans to raise up to ₹1,000 cr through debentures. 
  • ⚖️ Delhi High Court restrained Zydus Lifesciences from selling its breast cancer drug Sigrima 
  • 🛣️ IRB Infra and IRB Infrastructure Trust’s toll revenue rose 35% YoY to ₹517.2 cr in June 2024. 

📊 Results corner 

  • 🖥️ TCS net profit rose 8.72% YoY to ₹12,040 cr in Q1FY25 and announced an interim dividend of ₹10 per share with the record date of July 20th.  
  • HCL Tech posts net profit of ₹4,259 cr in the April-June quarter, up 20.62% YoY. Interim dividend announced ₹12 per share with a record date of 23 July. 
  • DMart’s net profit rises 17.5% YoY to ₹773.8 crore; revenue up 18.6% to ₹14,069.1 cr. 

🌱 Sustainability Corner:

  • Larsen & Toubro’s renewable arm has secures mega orders in the Middle East to build two gigawatt-scale solar PV plants with a cumulative capacity of 3.5 gigawatt (GW). 
  • 🔌 JSW-MG partnered with Shell India to improve India’s public charging infrastructure. 
  • 🌱 ONGC plans a ₹2 lakh crore investment by 2038 to achieve net-zero carbon emissions through renewables and green hydrogen plants. 
  • ☀️ Torrent Power’s subsidiary signed a deal to build up to 50 MW of solar power plants for ARS Steels & Alloy International. 
  • 📉 Tesla, Inc. postpones the launch of its Robotaxi service from August 8 to October causing its share price to drop 8.4% on Thursday. 

🚀 IPO Corner:

Listings:

  • Bansal Wire Industries’ IPO debuts with 39% premium on listing day, opening at 356 per share on July 10th. 
  • Emcure Pharmaceuticals, led by Namita Thapar, made a striking entry into Indian stock exchanges on July 10, listing at ₹1,325.05 per share on the BSE, showcasing a notable 31.45% increase from its issue price of ₹1,008. 
  • Ambey Laboratories, a SME company, listed its shares at 85 each on July 11, 2024, on the NSE SME platform, achieving a substantial 25% gain from the issue price of 68 per share. 
  • Ganesh Green Bharat’s shares debuted on the NSE SME platform on Friday with a 90% premium, opening at ₹361 compared to an issue price of ₹190. 

Upcoming SME IPOs:

    • Tunwal E-Motors Limited IPO – 15th to 18th July 
    • Kataria Industries Limited IPO – 16th to 19th July 
    • Macobs Technologies Limited IPO – 16th to 19th July 

IPO News:

  • Reliance Jio Infocomm Ltd, the telecom unit of Reliance Industries Ltd, is poised for a substantial IPO in 2025, potentially valuing it at over ₹9.3 lakh crore, according to a Jefferies note. 
  • Reliance Jio is preparing for a $112 billion IPO in 2025.  

Cover Story: Steady Hands on the Wheel Results & Budget Anticipation turns Markets Volatile   

As an investor, you’re behind the wheel, aiming for a steady journey towards your financial goals. There are times, however, when the road gets a little more unpredictable – results season and budget anticipation are two prime examples. Let’s explore how these events can cause the market to swerve and how you can navigate them with confidence. 

What is Results Season? 

Imagine all the companies you might invest in – the big manufacturers, the trendy tech startups, the cozy coffee shops you enjoy. Every few months, these companies release their “quarterly results.” Think of it like a progress report that tells everyone how they’ve been doing. They share details about their sales, profits, future plans, and any challenges they’re facing. 

Why Does Results Season Cause Market Swerves? 

Investors are looking for clues about a company’s health and future prospects. If a company reports strong results, exceeding expectations, investors might get excited and push the stock price up. On the other hand, if a company disappoints with weak results, the stock price could take a dip. 

This anticipation and reaction can create some choppiness in the market. Leading up to results season, investors might be cautious, waiting to see how their chosen companies perform. 

Once the results are released, the market can react quickly, with stock prices adjusting based on the news. 

Profits and Losses: A Mixed Bag from the Results Season 

This week, some companies like Titan (up 9% year-on-year) and Bank of India (loans grew 17.25% YoY, deposits grew 9.91% YoY) reported strong growth, exceeding analyst expectationsHowever, others like Maruti Suzuki saw a slowdown, leading to a slight dip in their stock price. This mixed bag of results kept the markets indecisive. 

This week, some companies like Titan (up 9% year-on-year) and Bank of India (loans grew 17.25% YoY, deposits grew 9.91% YoY) reported strong growth, exceeding analyst expectations. 

Budget Buzz: How Government Plans Can Shift Gears 

The government also plays a significant role in the market. Every year, the finance minister presents the budget, outlining the government’s spending and taxation plans. This budget can influence different sectors of the economy in various ways. 

For instance, if the budget allocates more funds to infrastructure projects, companies in the construction and engineering sectors might see a boost. 

Why Does Budget Anticipation Cause Volatility? 

Just like results season, investors try to anticipate how the budget might affect different companies and industries. If the budget proposes policies that benefit certain sectors, investors might rush to buy stocks in those companies, causing their prices to rise. Conversely, if the budget introduces measures that could hurt certain industries, investors might sell their holdings in those companies, leading to a price drop. 

This anticipation and potential impact can create some market uncertainty leading up to the budget announcement. Investors might be cautious, waiting to see what the government has in store. Once the budget is unveiled, the market can react quickly, with stock prices adjusting based on the perceived effects on different companies. 

Here’s What Could Move the Markets in the Coming Days: 

 The Union Budget: As mentioned earlier, the budget is the big event everyone’s waiting for. If the government announces measures to boost economic growth and support businesses, the market could react positively. However, any unexpected tax hikes or spending cuts could trigger a selloff. 

Global Cues: The Indian market is also influenced by what’s happening globally. Keep an eye on factors like interest rate decisions by major central banks and global economic data releases, as these can impact investor sentiment and cause fluctuations in the Indian market. 

Company-Specific News: Earnings season is still ongoing, so pay attention to upcoming results from major companies. Strong performances could boost their stock prices, while disappointing results could lead to a decline. 

So, How Do You Handle These Market Swerves? 

Don’t fret! It’s normal for the market to experience some unexpected turns during results season and budget anticipation. Here are some tips to help you navigate these times: 

  • Stay Informed: Keep yourself updated on company results and upcoming budget announcements. This will help you understand why the market might be behaving a certain way. 
  • Focus on the Long Haul: Don’t get distracted by the day-to-day fluctuations. Remember, you’re likely invested for the long term, so focus on companies with strong fundamentals and solid growth potential. 
  • Diversify Your Portfolio: Don’t put all your eggs in one basket! Spread your investments across different sectors and asset classes to manage risk. This way, if one sector is hit during a volatile period, others might provide stability. 

Remember, volatility is an inherent part of the stock market. By staying informed, maintaining a long-term perspective, diversifying your portfolio, and potentially seeking professional advice, you can navigate these occasional market swerves and stay on track towards your investment goals. 

Bonus Tip: Stay Calm and Collected! It’s easy to get swept up in the emotions of the market. But remember, short-term fluctuations don’t necessarily reflect the long-term potential of a company. Stick to your investment plan and avoid making hasty decisions based on market jitters. 

Now, go forth and steer your investments towards success! 

Upcoming key financial events for the week: 

Date  Event 
15-Jul-24  USD Empire State Manufacturing Index 
16-Jul-24  USD Core Retail Sales m/m 
17-Jul-24 18-Jul-24  
18-Jul-24 GBP Claimant Count Change 
  EUR Monetary Policy Statement 
  USD Unemployment Claims 
  EUR ECB Press Conference 
19-Jul-24 GBP Retail Sales m/m 
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