The Week That Was @ 7:30 AM – Saturday, August 17th 2024

Nifty started the week gone by on a wishy-washy note, with the benchmark struggling to keep its head above water following:

1. Mixed bag of Q1 earnings reports.

• Hindenburg-Sebi led volatility.

• Nifty’s depressed price action simply echoed the pessimism around HDFC Bank which ended 1.10% lower after the latest MSCI rebalancing announcement which said the weight of HDFC Bank would be increased in two tranches against expectations of one single push.

# The Good News: Despite the three headwinds, the sky did not fall at Dalal Street as Nifty bulls regrouped in Friday’s trade, courtesy of bargain hunters + value buying as boosting sentiments were catalysts like:

1. Wall Street jumping out of the gate, also helped by solid earnings from Walmart. (Please note Dow was up around 3% while Nasdaq was up 5.5% on weekly basis)

• Mild PPI and CPI inflation reports solidified expectations that the Federal Reserve will start cutting interest rates at its next meeting in September.

• Strong retail sales numbers dismissed fears of a recession in the US.

# Bottom-line: From here on, the street will spy with one big eye on the US September jobs report to be wired on September 6th.

Hopefully, this September unemployment report gets the Fed to cut interest rates by 50 basis points.

# Long story short: Investors anticipate bigger half-point interest rate cut in September rather than a quarter-point cut.

1. Ola Electric share price hit the roof as it is now up 75% from IPO issue price. (The street expects EV manufacturing costs to fall significantly by financial year 2027 – 2028, while that of Internal Combustion Engine (ICE) scooters may go up due to emission standards).

• Marksans Pharma flared up 7% to hit a record high of Rs 219.50 after the company reported strong earnings for the June 2024 quarter (Q1FY25)

• Hindustan Copper jumped 4% after profits grow two-fold in Q1 earnings, reaching Rs 113.40 crore for the quarter ending June 30, 2024.

• HeroMoto Corp slipped 1.5% to Rs 5080 despite a massive surge in its net profit as Q1 FY25 climbed 47.3% Y-o-Y to Rs 1,032 crore. (A robust recovery seen in the 110-125 cc motorcycle segment after the launch of Xtreme, sturdy demand for its electric scooter Vida, and the promising condition of the overall economy).

• Aarti Industries stock tumbled 19% as its management anticipates 20-30% volume growth in FY25, although margins are expected to remain under pressure for at least next 1-2 quarters due to continued dumping from China.

• Dr Reddy’s Labs shares inched 0.11% lower at Rs. 6816 after US FDA issued an establishment inspection report (EIR) to the company, for its manufacturing facilities (FTO-7 and FTO-9) in Duvvada, Visakhapatnam, Andhra Pradesh.

• GMR Airports Infrastructure dropped 3.63% to Rs 95.50 following a weak performance in Q1FY25 a the total loss attributed widened to Rs 141.65 crore from Rs 29.80 crore in the corresponding quarter of FY24.