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The Weekly Market Roundup

Published in Investment Saturday, 19 August 2017 15:32


By Vinod Nair, Head of Research, Geojit Financial Services.

Week that was...

Market bounced back after Nifty making a low of 9686, a sell off triggered by SEBI’s action against 331 shell companies, geopolitical tensions in Asia and weak global cues. This bounce back was led by ease in tensions between N. Korea & US and FED’s dovish future outlook. Bargain hunting post healthy correction in mid and small cap and DIIs inflows supported the up-move. 
The ongoing India-china border issue is in status-quo and is not mounting up. The market has a very rational view that neither of the two big economies will like to extend the issue and will be neutralised or maintained on a status-quo, not impacting their financial interest. Broader market continued to outperform as midcaps and small caps remained attractive to domestic liquidity after the profit-booking spells. Metals, FMCG, Realty and Auto outperformed the key indices; in-spite of setbacks from USFDA Pharma sector witnessed some bottom fishing. Escalated worries about the Trump administration's ability to push through economic reform rattled investors in US leading to weak global cues pushing consolidation in domestic market. Further, a major sell-off witnessed in IT major Infosys due to surprise resignation by CEO and terrorist in Europe attack put market in cautious mood.
Week ahead...
On YTD basis India has performed well led by strong liquidity and reform. But in the recent 1 to 3months, the inflows from FIIs have reduced which may impact the performance in the near-future. FIIs have started to pull out money from the domestic market, till date the outflow is Rs7,628cr. Disparity led by high valuation and lower than expected financial results leading to downgrade in FY18 earnings is a key risk. Given lack of domestic triggers, the market is likely to perform as per the direction of global market.
 

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