Weekly Market Analysis: Record Highs and Economic Stimuli Propel Global Stocks

Markets sustained their upward trajectory for the third consecutive week, continuing to hit fresh record 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.

Weekly Recap

Touch and go?

• Markets mounted a solid climb, particularly on Thursday, hitting new record highs on Friday before pulling back slightly, ultimately closing the week 1.5% higher.
• The broader indices also surged to new all-time highs, with large-cap stocks attracting more buying interest than mid and small-cap stocks.

The bigger picture

• Asian markets saw a good run last week, largely driven by China's most aggressive stimulus package in years. 
• The People's Bank of China, the nation's central bank, reduced interest rates and implemented various measures to lower borrowing costs, aiming to stimulate the faltering economy. Also read: Key Policy Changes by the PBOC

The winners

• Bharat Petroleum had an impressive run last week, climbing 10.9% as the oil giant received production concessions from Abu Dhabi’s Council for Economic Affairs.
• Meanwhile, Tata Steel’s newly commissioned blast furnace at Kalinganagar in Odisha, coupled with its expansion plans, resonated positively with investors, boosting its stock price by 9.6%.

The losers

• LTIMindtree had a challenging week, ending 3.7% lower after being removed from the Nifty 50 index. 
• ICICI Bank closed the week down 2.4% after moving sideways for most of it, possibly due to investor concerns over its valuations.

Meanwhile…

• US jobless claims figures surprised investors last week, unexpectedly dropping to a 4-month low while corporate profits were revised upward in the second quarter.
• Crude oil prices slid again despite fresh geopolitical tensions between Israel and Lebanon, as Saudi Arabia abandoned its $100 crude target in a big to regain market share.

Brief

Market Outlook

Our take

• After reaching new record highs last week, investors are likely to look at valuations more closely with considerations for taking profits.
• With no significant domestic triggers, attention will shift to global markets for directional cues. Consequently, we anticipate the Nifty to remain rangebound, trading between 25,800 and 26,400 levels next week.

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