Bulls storm Dalal Street as Nifty hits fresh historic high at 25268.35; Notches gains for 3rd consecutive week.

The Week That Was @ 8:00 AM – Saturday, August 31st 2024

August 26th to August 30th 2024.

Bulls storm Dalal Street as Nifty hits fresh historic high at 25268.35; Notches gains for 3rd consecutive week.

The positive catalyst: Liquidity, liquidity and liquidity on backdrop of the stage which is set for the long-awaited Federal Reserve rate cuts to finally begin from September 18th.

The only question is if the cut will be 0.25% or 0.50%…

 

Nifty (+1.66%, 25236)
Sensex (+1.58%, 82366)

The Good News: Dalal Street was seen firing on all cylinders confirming the bullish narrative of a more sustainable rally higher on our hands.

The Seven-Positive Catalysts:

1) Wall Street jumping out of the gate after remarks by Federal Reserve Chair Jerome Powell statement on August 23 that the “time has come” for the US to start cutting interest rates. (Interestingly, the strong gains at Wall Street was despite Nvidia shares falling nearly 8% despite posting strong quarterly results and an optimistic sales outlook).

2) FIIs posted a handsome buy figure in the week gone by to the tune of Rupees 9217 crores.

3) Moody’s raises India’s 2024 GDP growth forecast to 7.2% in 2024, 6.8% in 2025

4) Sentiments buoyed after Mukesh Ambani unveiled a new AI-led road-ahead for Reliance Industries. RIL to Consider 1:1 Bonus Issue in Board Meeting on September 5th

5) Upbeat US GDP data: The US economy grew 3% in Q2, faster than initially thought, easing recession fears.

6) The Fed’s Preferred Inflation Gauge is on track for September Rate Cuts! The Federal Reserve’s preferred gauge to measure underlying inflation held steady last month, with core prices rising 2.6% and the headline index up 2.5% in a report that is likely to cement the case for a September rate cut.

7) WTI crude futures dropped 3% in the week gone by to settle at $73.5 per barrel. (Investors factored in the likelihood of rise in OPEC+ supply starting in October)

 

# Bottom-line: Before the Fed outcome on September 18th; bullish traders will have to brace with two inflation reports and one employment report on September 6th

The two inflation reports:

1) The Consumer Price Index (CPI – retail inflation) report on September 11th

2) And on September 12th traders will have to brace for the Producer Price Index (PPI – wholesale inflation) report.

# Long story short: Bullish investors see a decent chance for 50bps Fed cut in September and now brace for US NFP amid Fed rate cut speculation.

Weekly Recap:
Instruments LTP Weekly % Change
Nifty 25236 +1.66%
Sensex 82366 +1.58%
Bank Nifty 51351 +0.82%
Nifty Midcap 16619 +0.95%
India VIX 13.35 (-1.18%)

Dow Jones 41563 +0.94%
Nasdaq 19575 -0.74%
Bovespa 136004 +0.29%

Crude Oil 73.55 (-1.71%)
Gold 2503 -0.26%
Silver 28.86 -3.25%
USD/INR 83.87 +0.07%

# Here are how indices performed in the week gone by:

Nifty ended 1.66% higher, hits fresh historic high at 25268.35; Extends its winning streak to 12 straight sessions; Notches gains for 3rd consecutive week.

Bank Nifty ended higher, up 0.82% and was up for the third straight week. (Bank Nifty’s new all-time-high continues to be at 53357.70 mark).

Nifty Private Bank index inched up 0.73% higher while Nifty PSU Bank index ended 0.45% lower on weekly basis.

In broader markets, the Nifty Mid-cap 100 index inched 0.95% higher while the Nifty Small-cap index gained 1.19%.

Bullish Sectors:
Nifty IT (+4.13%)
Nifty Reality Index (+3.47%)
Nifty Pharma (+3.06%)
Nifty Oil & Gas Index (+2.41%)
Nifty Media (+1.72%)
Nifty Infra Index (+1.66%)
Nifty Auto Index (+1.25%)
Nifty Metal (+1.24%)

Bearish Sectors:
Nifty FMCG Index (-0.55%)
Nifty PSE Index (+1.50%)

# In the week gone by, notable gainers amongst Nifty 50 were:
LTI MINDTREE +9.12%
BAJAJ FINSERV +8.73%
BAJAJ FINANCE +6.89%
HCL TECH +5.53%
BHARTI AIRTEL +5.46%

# And the losers were:
COAL INDIA (-2.58%)
KOTAK BANK (-2.05%)
ADANI ENTERPRISES (-1.85%)
GRASIM (-1.81%)
HUL (-1.34%)

STOCK SPECFIC NEWS:

Bajaj Auto flared up further by 4.66%y for the week on targets of 100K monthly sales of clean energy vehicles and launch of a new Chetak platform early next year. (The company recently launched the Freedom 125, the world’s first CNG-powered motorcycle. Around 2,000 units of the bike that features a 2-kg CNG and a 2-litre petrol tank with a range of up to 330 km has been dispatched). The firm is hoping to deliver 8,000-9,000 Freedom 125 CNG bikes in August, and by January we will hit the mark of 40,000 CNG motorcycles per month).(Source Business Standard)

Bajaj Twins (Bajaj Finserv+ 8.73% and Bajaj Finance +6.89%) lead from front amid buzz of Bajaj Housing Finance may launch a Rs 7,000 crore
IPO as soon as first half of September 2024. (Source: Moneycontrol)

Nifty Pharma hit fresh all-time high at 23275.50 but Zydus Life (-4.31%, 1127) ends on a weak note after receiving warning letter from USFDA for Jarod manufacturing unit. (Source Business Standard)

Sonata Software jumped 7.66% after the company announced that it has received a large multi-year, multi-million-dollar IT outsourcing contract from a US-based healthcare and wellness company. (Source: Business Standard)

 

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*RISK DISCLOSURES ON DERIVATIVES:*

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