FM’s Mission Economic Revival Successful, Sensex Posts Biggest Gain Of Decade

Share Market Weekly

Our Analysis

A spectacular week and stupendous Friday it was wow... This week it was N.Sitaraman who made a historic reform slashing the corporate taxes for the existing and the new manufacturing companies and brought an animal spirit to the market. This weekend turned special for all the investors with a record closing of the frontline indices. This time it was a successful attempt from the finance minister to revive the economy and bring the josh back to the D-street.

Even the market pundits have hailed FM for this move and compared her move with Manmohan Singhs reforms in 1991. Many of the experts consider this reform as one of the biggest moments for the economy post-1991.

Throughout the week, the market was highly dominated by the bears. The Crude tanked more than 10 percent in a day after drone attacks on Saudi oil facilities. Moreover, lower GST collection dragged Nifty more than 3.3 percent. However, FMs announcement changed market breadth and direction.

Going ahead, Investor would like to see the interest rate cut by the RBI. However, in between, with no major domestic trigger, the market will track the global clues. Indeed the market is in bullish mode and every dip should be taken as an opportunity. The levels for nifty will be 11,150-11,200 on the downside and 11,450 on the upside.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, the Indian share market had a negative closing but managed to finish above 11,000 marks. The broader markets were buoyant as mid and small caps outperformed, which was promising. the Sensex declined by 261.68 points at 37,123.31, while Nifty was down 72.40 points at 11,003.50.

2) On Tuesday, The Indian equity market tracking the geopolitical tensions surrounding Saudi Arabian oil supplies triggered a selloff in todays session. There remains a major worrisome regarding the current account and fiscal deficit that could take a hit if the oil prices continued to rise in the same manner. At closing, the Sensex was down by 642.22 points at 36,481.09, while Nifty declined by 185.90 points at 10,817.60.

3) On Wednesday, the Sensex was up 82.79 points at 36,563.88, while Nifty was up 23.10 points at 10,840.70. Among sector, except pharma, all other sectoral indices ended in the green led by the metal, IT, infra, energy, auto, and bank.

4) On Thursday, the Sensex declined by 470.41 points at 36,093.47, while Nifty was down by 135.90 points at 10,704.80. All the sectoral indices ended in the red led by the metal, pharma, bank, auto, energy, IT and infra, while smallcap and midcap index also declined by 1.60 & 1.47 percent.

5) On Friday, It was a blockbuster day for the Indian indices as the Sensex was up 1,921.15 points or 5.32% at 38,014.62, while Nifty was up 569.40 points or 5.32% at 11,274.20.

Broader Index & Global Market:

-The global market traded mixed over this week, there was geographical tension after the drone attack on the Saudi oil facility, however, the Federal Reserve cut interest rates as expected and further monetary easing, given the relief among the global market.

- The broader market standstill after rallying in last week, however on Friday the rally resumed posting the decent returns. The metal, paper, auto, bank are looking bullish, while the IT pack had weakened.

Movers & Shakers

Shares of HAVELLS surged more than 8 percent, after the deduction of the corporate tax by the FM Nirmal Sitaraman.

Shares of YESBANK dropped more than 16 percent in a week after CARE downgraded NCDs of the bank's promoter, MCPL.

Key Market Drivers

  • The Drone attack on Saudi Aramco oil facilities is estimated to impact 5 million BPD of oil production
  • Mutual funds collection via SIP up 7.5% to Rs 8,231 cr in Aug.
  • India, the US working towards early resolution of trade issues: Piyush Goyal.
  • FM Nirmala Sitharaman working on the fourth booster dose to re-energize the economy.
  • Japan's exports fall for 9th straight month as global demand falters.
  • Fed cuts interest rates, signals holding pattern for now.

Event Watch

International:

  • US Markit Mfg PMI.
  • US GDP Annualized QoQ
  • CH BOP Current Account balance

Domestic:

  • Crude price
  • INR Price

Stocks To Watch

ONGC & NIIT On Upside while, WIPRO & TCS on Downside.