The Wrap🌯 29th Oct 2023 | Market Top?
The Wrap🌯 29th Oct 2023 | Market Top?
Your weekly digest of everything important in Indian Stock Market
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The worst week of 2023, all sectors end in red, macro jitters throughout, earnings momentum continues
Click here to read about how to understand and interpret the above grid.
If you’re a regular reader of TheWrap, you would have been well prepared to face the volatility this week. Even in last week’s issue we highlighted how US 10 year bond yields at 5% along with stretched market breadth demands one to be cautious.
This week was the worst of 2023, in terms of drawdowns for the Indian market.
Over 1275 stocks were down more than 3% on Oct 23rd - the worst single day market performance of 2023.
When yields start moving north of 5% (which they haven’t been for more than a decade), large amounts of pension fund money finds an alternate and viable market to invest that also happens to be risk free! That’s probably one of the reasons why yields were down this week to 4.83% (when money flows in to bonds, demand rises, so does price and yields drop → yields are inversely related to price).
November will be challenging month for macro as well - starting next week you will hear a lot about Bank of Japan and its interest rate decision. BOJ has been so far slow to hike interest rates and kept them at negative, it may hike them to zero in the coming week. Why? Because the JPY has never been as weak against USD in the last 20 years, as it is now.
JPY is one of the most liquid currencies in the world and if even the most dovish central bank in the world starts hiking rates, you know the speculations for US Fed to hike will run wild too! Next week also has a US Fed meet and hike decision - so in all, expect the coming week to be a turbulent one as well.
Note: For those who want to learn more about how interest rates impact currency movement and what carry trades are, I will leave links to some good videos in the curated section.
Moving focus to our markets, every index was down by more than 1% this week. The worst performance came from Media at -6.49% and best (which was also a negative) was from FMCG at -1.25%.
But all is not doom and gloom. Earnings season and commentary has been robust so far and few stocks are indeed making new highs largely driven by earnings momentum.
There 130 stocks that ended in green for last two week’s consecutively. Its a good idea to focus on these and use them as a starting point to research and narrow down further. Its very likely that these will showcase further strength from here on.
I am sharing the list of all 130 of them, you may click on ‘Show me 130 positive movers’ button to access this list.
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