Weekly Market Wrap: D-Street’s winning streak snapped amid global concerns. What lies ahead?

Snapping a four-week winning streak, Indian equity benchmarks ended the passing week with a cut of half a percent as traders opted to book profit as strong economic data from the U.S. reignited rate concerns. Some concern also came with a report stating that Indian fintech start-ups raised a total of $1.4 billion in the first half (H1) of 2023, a massive year-on-year (YoY) drop of 67 per cent from $4.3 billion raised in the same period last year. Besides elevated levels of crude oil prices also dented investors’ sentiment. 

The BSE Sensex slipped 524 points, or 0.8 per cent, at 66,160.2 during the week ended July 28, while the Nifty declined 99 points, or 0.5 per cent, to 19,646. Sector-wise, the BSE Power index surged the most (6.5 per cent) during the week gone by. While BSE Realty and BSE Healthcare indices have registered a gain of 5.1 per cent, and 3.9 per cent, respectively. On the other hand, the BSE Bankex index has registered a weekly decline of 1.5 per cent. 

As many as 26 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a weekly gain of 12.2 per cent, Cipla emerged as the top gainer in the index. It was followed by NTPC (7.7 per cent), Power Grid Corporation of India (5.8 per cent), Dr. Reddy's Laboratories (5.7 per cent), and Shree Cement (4.1 per cent). Hindalco Industries, Adani Ports, Sun Pharma, and Tata Steel also advanced by over three per cent. On the other hand, Tech Mahindra, Kotak Mahindra Bank, and Bharat Petroleum Corporation declined 8.7 per cent, 4.8 per cent, and 4.4 per cent, respectively. 

Global headwinds: Deepak Jasani, Head of Retail Research, HDFC Securities said, the Global shares traded mixed on Friday as investors digested monetary policy steps/messages from Japan. “The Bank of Japan's policy shift could have seismic implications for global money flows, since a cheap yen that's been inexpensive to borrow has been a mainstay of capital market funding for years, and it now faces upward pressure from rising Japanese yields just as global rates seem to peak”. 

Market Macros: Vinod Nair, Head of Research at Geojit Financial Services said, the domestic market passed through a volatile week, with the benchmark index underperforming its broader peers. “The recent correction of the domestic market can be attributed to several headwinds, including mixed Q1 results, a reversal in FII activity, a rising dollar index & US bond yields, and an increase in crude oil prices”. 

He added that the Pharma stocks showed resilience amid the volatility due to a positive start to the earnings season and expectations of increased demand from developed economies. Furthermore, prospects of reduced US pricing issues and expanding operating margins also supported the sector. “The FOMC's decision aligned with market expectations, implementing a 25bps hike and emphasising a data-centric approach for future rate actions. However, the better-than-expected US Q2 GDP data, while positive, impacted the domestic market mood as it suggested the likelihood of another rate hike”. In the coming days, domestic earnings will remain a crucial driver, while global cues will also play a vital role in shaping market trends”, Nair said.