The Wrap🌯 24 Dec 2023 | Consolidation
Your weekly digest of everything important in Indian Stock Market
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Markets consolidate, Volatile Days, Dollar Retreats, US PCE Inflation below 2%, Calls for Rate Cuts grow louder
This week included one of the worst single day for stocks and yet Nifty ended the week to nearly where it started. Its the sign of the interesting times we live in.
On 20th Dec 2023, over 1137 stocks ended the day with declines of 3% or more. The above chart depicts the frequency of such broad based declines. They do not tend to happen often but they aren’t rare either. We had a similar market day on 23rd Oct as well as 12th Sep this year.
Why am I highlighting this? So as an investor you dont take one day’s price action and extrapolate market doomsday scenarios.
Looking at the weekly performance of indices, the market ended almost flat, to nearly where it started the week.
PSU Banks, Autos and Finance witnessed minor corrections as investors book profits while Pharma and FMCG indices were in the lead.
Things are looking great at the macro front. This week, US reported its PCE Inflation rate, a metric Jerome Powell and US Fed is known to closely track.
The US PCE index is below 2% Fed target for the first time since the pandemic! Even the biggest skeptic of bull markets would at least agree that the trajectory of inflation is down and not up.
Calls for rate cuts will only grow louder from here on. Dollar Index, US Bond Yields, Oil are all in retreat.
Closer to home, lot of corporate activity this week with a variety of spin offs, mergers, delistings to choose from. They are all highlighted under the corporate announcement section of this letter.
Expect markets to be range bound and consolidate further with a bullish biasness. Market breadth wise we are near the top percentile so remain alert.
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