Beauty and Personal Care (BPC) e-retailer Honasa Consumer's initial public offering (IPO) has failed to find backing from analysts due to the company's weak financial track record and expensive valuation. T Manish, research analyst at Samco Securities suggests avoiding the IPO as the company's financial performance does not inspire confidence. "The profit has been inconsistent and advertising and marketing expenses are incredibly high at around 40 per cent of the revenues.
Trading sentiment in the equity markets this week will be guided by global cues, Covid-19 trends and quarterly earnings by market heavyweight TCS, analysts said. Investors will also monitor movement of rupee and crude oil as well as progress of monsoon, they added.
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
Sugar prices are hovering near six-year highs, leaving a bad taste in Indian consumers' palates but sweetening the portfolios of investors in related stocks at Dalal Street. Shares of sugar manufacturers such as Piccadily Agro, DCM Shriram, Magadh Sugar, and Bajaj Hindustan have rallied up to a whopping 200 per cent so far in the financial year 2024 (FY24) as deficient monsoon rains in major sugarcane producer states like Maharashtra and Karnataka are expected to lead to a shortfall in sugar output ahead. In comparison, the BSE Sensex has modestly gained 11 per cent during this period.
Stock markets will focus on global trends for further direction in this holiday-shortened week as the earnings season is largely over, analysts said. Trade experts expect the key benchmark indices to move sideways as investors are trying to decode the impact of rising inflation on foreign portfolio investments. Inflation data released by the US and China last week have fanned fears of earlier than expected rate hike and boosted US bond yields.
Global trends, the last batch of Q2 earnings and domestic macroeconomic data will dictate terms in the equity market, which had an extended weekend last week, analysts said. "FIIs' behaviour along with inflation numbers from US and China will remain key factors for this week. After an extended weekend, Indian markets are likely to start a fresh week with a positive note on the global backdrop. "However, there is a risk of selling pressure at higher levels as we are underperforming the global peers where the near-term texture has changed to 'sell on rise' from 'buy on dip'," Santosh Meena, head (research) at Swastika Investmart Ltd, said.
Consumption-related stocks, such as hotels, and quick service restaurants (QSRs), have been hitting the ball out of the park ahead. On the other hand, the Miss World Pageant scheduled for later this year in New Delhi, too, could provide some tailwind to these stocks, especially hotels and aviation. However, analysts suggest investors put their best foot forward and buy these counters only on a decline given the recent rally and economic headwinds.
The dream-run in railway stocks may soon run out of steam, caution analysts. The rally, which has lasted nearly a year, may meet time-wise correction post the Union Budget announcements as investors begin scalping profits. "There is going to be a build-up in expectations for the sector from the Union Budget, which is still two-odd months away.
The Fed interest rate decision, domestic macroeconomic data announcements and quarterly earnings will be the major sentiment drivers for the equity market in a holiday-shortened week ahead, analysts said. Investors will also take cues from the monthly auto sales numbers to be announced on Monday. Equity markets will remain closed on Thursday for Diwali Laxmi Pujan and on Friday for Diwali Balipratipada.
Domestic equity markets are likely to see volatility in a range-bound trade this week amid geopolitical worries and growing expectations of a sharp hike in interest rates, analysts said. Global trends, inflation data and the last batch of quarterly earnings will drive the markets this week, they said. Besides, the rupee movement, FII investment pattern and Brent crude trends would also be watched by investors.
Global markets trends, inflation, release of industrial output data and quarterly earnings will dictate movement of the equity benchmarks this week, analysts said, adding that volatility might continue amid slew of announcements of macroeconomic data at the global level too. Moreover, foreign fund movement, crude oil prices and trend in rupee would also act as major drivers for the equity market, they added. "The direction of global equity markets along with movement in dollar index and crude oil prices will continue to dominate while inflation numbers of the USA on May 11 and inflation and IIP numbers of India on May 12 will also cause volatility in the market," said Santosh Meena, head of research, Swastika Investmart Ltd.
With the Budget overhang gone, investors are breathing a sigh of relief and are back to make fresh calls.
'...similar to the 2008 global financial crisis, the 2012 taper tantrum, or the 2018 midcap crash.' 'This could lead to a substantial decline in activity and revenues for the broking industry.' 'When this will happen is uncertain, but as brokers, we must be prepared for such a downturn.'
Over the past week, the BSE Sensex ended on a muted note, showing a marginal gain of 2.25 points at 28,114.56.
Stock markets are expected to remain under pressure this week due to the overhang of US presidential polls and uncertainty over global growth due to resurging cases of coronavirus, according to analysts.
The IT major is followed by RIL (Rs 795,628.55 crore), HDFC Bank (Rs 624,362.11 crore), Hindustan Unilever (Rs 367,880.69 crore) and ITC (Rs 367,513.78 crore).
Concerns over economic slowdown, muted earnings, crisis in the auto industry and global trade issues have been weighing on investor sentiment, experts said.
Despite gold prices hitting record highs, analysts aren't gung-ho about the outlook for gold financiers Muthoot Finance and Manappuram Finance. This, they said, was due to intense competition from banks, coupled with stagnating loan books and likely pressure on margins.
Equity benchmarks Sensex and Nifty ended on a mixed note on Wednesday as the euphoria about the Budget fizzled out, with investors going for profit-taking ahead of the Fed interest rate decision. The 30-share BSE benchmark Sensex climbed 158.18 points or 0.27 per cent to settle at 59,708.08 after it trimmed most of the intra-day gains. During the day, it had zoomed 1,223.54 points or 2 per cent to 60,773.44.
The strong response for the IPOs, however, has shifted liquidity away from the secondary markets, with the benchmark Sensex falling 1.3 per cent in the previous two trading sessions.
The US Fed interest rate decision, domestic macroeconomic data announcements and ongoing quarterly earnings are some of the major factors that will drive the stock markets in a holiday-shortened week, analysts said. Besides, monthly auto sales numbers and the LIC IPO will also remain in focus, they added. Equity markets will remain closed on Tuesday for Id-Ul-Fitr (Ramzan Id). "The market is likely to kick off this week on a sombre note after a sharp fall in the US market then the focus will shift to the outcome of the US FOMC meeting, which is crucial amid record inflation and growth worries.
Indian equity markets are likely to witness volatility this week due to concerns over rising cases of coronavirus and expiry of derivatives contracts, analysts said. Further, progress surrounding the COVID-19 vaccine, related updates, US stimulus talks and global cues would dictate the market trend, traders said. "Going ahead, the market is likely to be volatile as sentiments oscillate between fear of rising COVID cases globally and optimism over vaccine progress. Investors would closely watch out development over the US stimulus talks," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
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Investor wealth zoomed over Rs 10.48 lakh crore in two days as the Budget-driven market euphoria continued to charge bulls on Tuesday.
Equity benchmarks extended their decline for the fourth straight session on Wednesday, with the Sensex falling 214.85 points after the Reserve Bank raised the key interest rate by 50 basis points. Continuous foreign fund outflows and surging crude oil prices also weighed on markets. The 30-share BSE benchmark dropped 214.85 points or 0.39 per cent to settle at 54,892.49.
Focus will, however, shift back to corporate earnings, liquidity situation and global events - specially crude price.
Progress of monsoon, investment trend by foreign investors and the movement of rupee against the dollar will also influence sentiment
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