The Wrap🌯 03 Dec 2023 | All Time High🎉
Your weekly digest of everything important in Indian Stock Market
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Nifty makes a new all time high, Fed soft landing on the cards, bulls in total control
All Time High, that’s what Nifty achieved this week.
If you have been a bull, this is a time for you to celebrate. If you have been a bear, you should really contemplate your investing process.
Public sector firms led the advance with PSE index rising by over 🔼5.74%, followed by commodities at 🔼3.54%, finance & energy at 🔼3.1% each.
Not a single sectoral index ended the week in red!
The key question to ask now is, can this sustain and run even higher?
My personal answer to that questions is Yes!
Here is why.
Inflation is yesterday’s news. Market expects the Fed to maintain the current interest rates in the upcoming December meet. If the current trajectory of inflation and economic data continues, market further expects Fed to cut interest rates in 2024.
All the talk of recession in media, is just talk, there is no data backing it.
Zero, Zilch, Nada!
Its no coincidence that the week of best performance by stocks coincides with a ~6.15% drop in US 10Yr yields (which now stand close to ~4.197%).
The global economy is swiftly stabilizing back to pre Covid levels
Here is a bunch more economic data below (mostly for US - being the mother market) which further drives home the above point. Notice how most indicators are now in line with what they used to be pre pandemic.
Can anything disrupt the bulls?
Yes, the answer is valuations and market breadth.
If you’re a new investor looking to deploy additional capital - you will have to hunt very hard to find bargains in this market.
Valuations are fine in some sectors like pharma while insane in others like Railways.
You also wont find bargains like you did eight months ago.
Market breadth wise we are trading at 80th percentile which isn’t a great spot to open new positions.
Unlike March 2023, when you could throw money at any stock and be sitting on 30-50% gains eight months later, its an increasingly stock specific play going forward.
Time to buckle up and start digging (researching).
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