Weekly Stock Market Review: Impact of Geopolitical Tensions and Volatility

Markets ended lower for the second consecutive week, driven by heightened volatility and increasing geopolitical tensions. 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 market report.

Weekly Recap

Topsy-turvy

• Markets faced another choppy trading week, initially recovering from the previous week's crash only to give up those gains and ultimately close slightly lower. 
• However, the broader markets outperformed the key benchmarks, with both the BSE Small-cap and Mid-cap indices recording gains of 1% each.

The big highlights

• The global trade environment continued to be influenced by the intensifying conflict between Iran and Israel, along with the residual effects of the latest US jobs report. 
• Indian investors also had key events to consider, including state elections and the RBI’s decision to maintain repo rates for the 10th time in a row.

Top Performers

• Divi's Labs soared to an all-time high, driven by positive coverage from Citi that highlighted the company's breakthroughs in obesity and diabetes treatments and strategies to de-risk its supply chain. 
• LTIMindtree also gained from a brokerage upgrade, with JP Morgan expressing confidence in the IT sector and the firm's strong position within it.

The losers

• Titan was the week’s biggest loser, in a challenging week for consumer-facing players. While its Q2 update showed strong revenue growth, lingering concerns over profitability caused its shares to fall.
• Britannia also fell, in line with the broader downturn in the FMCG sector, which felt the pinch from the RBI's cautious approach towards inflation.

Meanwhile…

• At home, industrial growth contracted in August for the first time in 22 months, while passenger vehicle sales plunged by 19% in September.
• CPI figures from the US showed a 2.4% annual increase in general price levels. This rate was lower than the figures for August but still exceeded market expectations.

Market Brief

Market Outlook

Our take

• As Q2FY25 kicks off, stock-specific action is likely, driven by earnings and management commentary. 
• With markets giving up the crucial 25,000 support level last week, we expect Nifty to remain rangebound, likely trading between 24,700 - 25,300 levels next week.
• A bullish reversal could be on the horizon if the Nifty decisively crosses the 20-day exponential moving average, which is currently placed around 25,300. 

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