<p>Mixed global cues and lack of domestic triggers will keep Nifty range-bound. Investor sentiments would be directed more by geo-political developments and foreign institutional investor (FII) activity. </p>.<p>Market reactions are also expected to reflect India’s weak Q2 GDP data, which came in at 5.4 per cent, below the anticipated 6.5 per cent, as well as China’s manufacturing PMI released over the weekend. Key global economic data set to be released this week includes the US and India’s manufacturing and services PMIs for November, US job openings data, comments from Federal Reserve Chair Jerome Powell, the RBI’s interest rate decision, and the US unemployment rate for November. </p>.<p>With BJP alliance Mahayuti’s staggering victory in Maharashtra Assembly elections, we expect a boost in government spending with added focus on infrastructure development. With the wedding season in full swing—an estimated 48 lakh weddings scheduled this year according to media reports—sectors such as hospitality, jewellery, consumer discretionary goods, apparel, and two-wheelers are likely to benefit from the surge in demand.</p>.India shining: The growth story as presented by the capital markets.<p>Last week, Nifty gained 3.3 per cent to close at 24,131 levels. FIIs finally turned buyers last Monday, after continuously selling for the previous 38 trading sessions. But the buying could not sustain and a sell-off to the tune of 11,750 crores, was seen on Thursday. This came after an escalation in geo-political tension between Russia and Ukraine and Israel launching first airstrike on Lebanon since ceasefire after saying that Hezbollah violated the truce. The US Federal Reserve minutes highlighted optimism about easing inflation and a resilient labour market, creating scope for gradual interest rate cuts, which impacted market sentiments. </p>.<p>Fundraising through Qualified Institutional Placements (QIPs) reached an all-time high in 2024, surpassing the Rs 1 lakh crore mark for the first time in a calendar year, reflecting strong liquidity and confidence in the equity market. Last week, Zomato and KEI Industries raised Rs 8,500 crore and Rs 2,000 crore, respectively, through QIPs, while Godrej Properties increased its placement size to Rs 6,000 crore, up from the previously approved Rs 4,000 crore. </p>.<p>NTPC Green Energy’s mega-sized IPO made a strong debut on the bourses, closing the listing day with a 13 per cent gain over its issue price. Similarly, the IPO of Enviro Infra Engineers listed at a notable premium of 49 per cent above its issue price.</p>.<p>The Cabinet has approved a proposal to waive the bank guarantees (BGs) that telecom operators were required to provide for spectrum purchases made up to 2022. This decision is expected to provide significant relief to major telecom companies, which collectively owe over Rs 30,000 crore in BGs to the government. </p>.<p>Insurance stocks witnessed volatility after media reports suggested that the government might advise them to reduce their reliance on the bancassurance channel for business. On the other side, there was also a positive development for insurance players as the Union Ministry of Finance proposed raising the foreign direct investment (FDI) limit in domestic insurance companies to 100 per cent up from existing 74 per cent. </p>.<p>Additionally, news reports suggest that the government may consider scrapping the windfall tax on domestic crude oil production and fuel exports, which could be beneficial for domestic oil producers.</p>.<p>Markets have experienced a correction of 10-12 per cent from their recent highs, primarily due to moderate earnings growth in H1FY25, persistent FII selling since October 2024, a fragile geopolitical environment, and a strengthening US dollar following Donald Trump’s victory in the US elections. </p>.<p>However, compared to the subdued first half, we expect corporate earnings to recover in H2FY25, supported by increased rural spending, a strong wedding season, and a pick-up in government spending. Therefore, we believe the recent correction and the resulting moderation in valuations present an opportunity to add fundamentally strong stocks for long-term investment.</p>.<p><em>(The author is Head- Research, Wealth Management, Motilal <br>Oswal Financial)</em></p>
<p>Mixed global cues and lack of domestic triggers will keep Nifty range-bound. Investor sentiments would be directed more by geo-political developments and foreign institutional investor (FII) activity. </p>.<p>Market reactions are also expected to reflect India’s weak Q2 GDP data, which came in at 5.4 per cent, below the anticipated 6.5 per cent, as well as China’s manufacturing PMI released over the weekend. Key global economic data set to be released this week includes the US and India’s manufacturing and services PMIs for November, US job openings data, comments from Federal Reserve Chair Jerome Powell, the RBI’s interest rate decision, and the US unemployment rate for November. </p>.<p>With BJP alliance Mahayuti’s staggering victory in Maharashtra Assembly elections, we expect a boost in government spending with added focus on infrastructure development. With the wedding season in full swing—an estimated 48 lakh weddings scheduled this year according to media reports—sectors such as hospitality, jewellery, consumer discretionary goods, apparel, and two-wheelers are likely to benefit from the surge in demand.</p>.India shining: The growth story as presented by the capital markets.<p>Last week, Nifty gained 3.3 per cent to close at 24,131 levels. FIIs finally turned buyers last Monday, after continuously selling for the previous 38 trading sessions. But the buying could not sustain and a sell-off to the tune of 11,750 crores, was seen on Thursday. This came after an escalation in geo-political tension between Russia and Ukraine and Israel launching first airstrike on Lebanon since ceasefire after saying that Hezbollah violated the truce. The US Federal Reserve minutes highlighted optimism about easing inflation and a resilient labour market, creating scope for gradual interest rate cuts, which impacted market sentiments. </p>.<p>Fundraising through Qualified Institutional Placements (QIPs) reached an all-time high in 2024, surpassing the Rs 1 lakh crore mark for the first time in a calendar year, reflecting strong liquidity and confidence in the equity market. Last week, Zomato and KEI Industries raised Rs 8,500 crore and Rs 2,000 crore, respectively, through QIPs, while Godrej Properties increased its placement size to Rs 6,000 crore, up from the previously approved Rs 4,000 crore. </p>.<p>NTPC Green Energy’s mega-sized IPO made a strong debut on the bourses, closing the listing day with a 13 per cent gain over its issue price. Similarly, the IPO of Enviro Infra Engineers listed at a notable premium of 49 per cent above its issue price.</p>.<p>The Cabinet has approved a proposal to waive the bank guarantees (BGs) that telecom operators were required to provide for spectrum purchases made up to 2022. This decision is expected to provide significant relief to major telecom companies, which collectively owe over Rs 30,000 crore in BGs to the government. </p>.<p>Insurance stocks witnessed volatility after media reports suggested that the government might advise them to reduce their reliance on the bancassurance channel for business. On the other side, there was also a positive development for insurance players as the Union Ministry of Finance proposed raising the foreign direct investment (FDI) limit in domestic insurance companies to 100 per cent up from existing 74 per cent. </p>.<p>Additionally, news reports suggest that the government may consider scrapping the windfall tax on domestic crude oil production and fuel exports, which could be beneficial for domestic oil producers.</p>.<p>Markets have experienced a correction of 10-12 per cent from their recent highs, primarily due to moderate earnings growth in H1FY25, persistent FII selling since October 2024, a fragile geopolitical environment, and a strengthening US dollar following Donald Trump’s victory in the US elections. </p>.<p>However, compared to the subdued first half, we expect corporate earnings to recover in H2FY25, supported by increased rural spending, a strong wedding season, and a pick-up in government spending. Therefore, we believe the recent correction and the resulting moderation in valuations present an opportunity to add fundamentally strong stocks for long-term investment.</p>.<p><em>(The author is Head- Research, Wealth Management, Motilal <br>Oswal Financial)</em></p>