Weekly Market Recap | Benchmarks Hit New All-Time Highs: Market Insights and Future Outlook

Markets extended their winning streak for the second consecutive week, with benchmark indices reaching new all-time highs. Here's our take on this week gone by, some stories you might have missed out on, and our thoughts on what to do going ahead, in your weekly report.

New highs!

• As anticipated, the markets extended their upward trajectory, reaching new all-time highs and closing 0.75% above last week's levels. This upmove was fuelled by positive global market trends, FII support, encouraging macroeconomic data and in-line outcomes from the FOMC meeting.
• This time, the broader markets outperformed the main benchmarks, with the BSE Small-cap, Mid-cap, and Large-cap indices increasing by 5%, 4.4%, and 1%, respectively.
• Volatility decreased considerably during the week, with the India VIX fear index dropping by approximately 24% over the last five days.

The big stories

• Globally, all eyes were on US inflation numbers last week, which defied expectations of a rise to ease instead to 3.3% in May, boosting hopes of a rate cut by September.
• At home, industrial production growth figures fell to 5% in April compared to 5.4%, while May CPI inflation eased to 4.75% from 4.83% MoM.

The winners

• Shriram Finance zoomed to take top spot as the week’s best performer, zooming 9.3% as the newest entrant to the Nifty 50’s market cap crossed Rs 1 lakh crore.
• Ultratech Cement’s shares hit their all-time high gaining 7.5% in a great week for the cement sector overall, buoyed by ongoing strong expectations for infrastructure demand.

The losers

• FMCG as a whole was a poor performer last week, with Hindustan Unilever leading the pack to be the biggest Nifty loser.
• Infosys also fell by 2.9% due to its downbeat annual revenue projections amid a difficult global macroeconomic climate.

Meanwhile…

• US jobs data also came in hotter-than-expected, which is seen as complicating the Fed’s path to rate cuts.
• European markets fared poorly due to the political fallout from European parliamentary elections’ results favouring far-right candidates and the French snap election.
• At home, the IRDAI rolled out new regulations regarding surrender value for life insurance policies. Read more: IRDAI Announces Major Changes in Life Insurance Policies: Impact on Life Insurers & Policyholders

Brief

Market Outlook

Our take

• With the general election concluded, it seems that investors are returning to business as usual, suggesting that we may not encounter as severe volatility as before. The Nifty is likely to be rangebound between 23,100 and 23,800 levels next week.
• Market attention is likely to shift towards factors such as the monsoon season, Q1 FY25 earnings, GDP growth, GST collections, and institutional activities.