Weekly Market Recap | From Turmoil to Triumph: The Inside Scoop on Record-Breaking Gains
Catch up on this week’s market highlights, influenced by recent political and economic events, and get insights into the next market trends.
Markets bounced back from the early-week turbulence, smashing records to finish at record-closing 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.
Market triumphs!
- Markets shattered records with their biggest weekly gain of 2024, surging over 3% from last Friday amidst a rollercoaster of emotions. After Tuesday's election scares, benchmark indices rebounded dramatically, climbing a whopping 10% from their lows.
- The excitement peaked on Friday when the Sensex soared to an unprecedented high of 76,795, and the Nifty 50 almost topped its record—just 18 points shy—of 23,338.
Reading the cues
- At home, a clear path for government formation surfaced as NDA allies backed PM-elect Narendra Modi for a third term, thus boosting market sentiment.
- Additionally, the RBI's revision of its FY25 growth forecast to 7.2% fuelled a broad-based rally.
Read More: RBI Maintains Repo Rate at 6.5%: Analysing the Market's Positive Reaction
The winners!
- Realty topped the list with a 7.4% weekly return, bolstered by the RBI's interest rate decision that fosters stability, supporting the real estate market and making housing more affordable.
- The IT sector also performed well - up 7.2% - attributed to attractive valuations that sparked renewed interest.
- Among stocks, Mahindra & Mahindra stood out with a weekly return of 14%, following a report of healthy sales volume in May 2024.
The losers!
- PSUs, particularly PSU Banks, saw heavy profit-booking last week due to stretched valuations. BPCL was the most affected, with a 4.5% drop over the week.
- While market participants initially expected PSUs to thrive under a NDA-led favourable policy environment, the sentiment shifted to widespread panic on Tuesday following the NDA coalition's slimmer-than-anticipated victory.
Meanwhile…
- In a prompt move, the European Central Bank slashed its interest rate by 25 basis points for the first time since 2019, citing a significant easing of price pressures and inflation expectations across all timeframes.
- The 10-year Treasury yield saw its biggest single-day gain in two months, following a stellar US jobs report, prompting investors to rethink the timeline for the next Federal Reserve rate cut.
Brief
Market Outlook
Our take
- The markets have successfully regained the ground lost earlier, with technical indicators now skewing the momentum in favour of the bulls as the Nifty nears an all-time high.
- Consequently, we expect the index to maintain a bullish trajectory in the coming week, potentially ranging between 22,900 and 23,700 levels.
- Following the upcoming ministerial allocations, market attention is likely to shift towards factors such as the monsoon season, Q1 FY25 earnings, GDP growth, GST collections, and institutional activities.