Welcome to the weekly edition of the Aftermarket Report, a newsletter where we do a quick weekly wrap-up of what happened in the markets—both in India and globally.
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Market Overview this week
Nifty opened the week near its high of around 24,800 but began a downward trend on the very first day. Following the Federal Reserve's interest rate decision, which indicated slower-than-expected rate cuts, the market gapped down below 24,000. Despite making two attempts to reclaim this level, it failed and subsequently continued its decline. By the end of the week, Nifty closed below its 200-day moving average and key support levels, finishing at 23,587.5—a drop of 1,200 points or 4.76%.
Sectorally, Metals had the worst performance this week, weighed down by the Dollar Index surging past 108 to reach a two-year high. The Information Technology (IT) sector dropped nearly 5%, despite strong guidance from Accenture. Most other sectors saw declines in the range of 2-4%. However, Nifty Pharma stood out as the only gainer, rising 1.56% on the back of positive developments in key markets and notable product announcements.
With limited positive triggers emerging from the recently concluded GST meeting, it remains to be seen how the markets will perform in the coming weeks. It’s worth noting that, with the Christmas and year-end holidays approaching, market volumes are expected to be thin as FIIs take a break for the next two weeks.
Tijori is an investment research platform, and they have constructed niche indices for various themes and sub-sectors. They help you get a sense of the market performance of narrow slices of the market.
What happened in India?
Vishal Mega Mart, Mobikwik, Sai Life Sciences, Inventurus Knowledge Solutions, and International Gemmological Institute made strong debuts on the stock exchanges on their respective listing days. Vishal Mega Mart saw a 43.5% increase, Mobikwik surged 89.25%, and Sai Life Sciences gained 39.28%. Inventurus Knowledge Solutions listed with a 42.96% premium, and International Gemmological Institute had a 22% premium.
The Indian rupee hit a record low of 85 per USD, pressured by a strong dollar, a hawkish Federal Reserve, a widening trade deficit, and a revised GDP growth forecast of 6.6%. Dive deeper
India's wholesale prices rose by 1.89% YoY in November 2024, easing from 2.36% in October, driven by slower food price increases, especially vegetables and onions. Manufacturing prices reached a 22-month high at 2%, while fuel and power prices declined. Dive deeper
India's merchandise trade deficit hit a record $37.8 billion in November 2024, as imports rose 27%, and exports declined 5.3%, marking a two-year low. Dive deeper
ITC's demerger of ITC Hotels will take effect from January 1, 2025, with ITC retaining 40% ownership and shareholders holding 60%, allowing the hotel business to pursue focused growth. Dive deeper
In addition, ITC acquired a 2.44% stake in EIH Limited and a 0.53% stake in HLV Limited, bringing its total holdings to 16.13% in EIH and 8.11% in HLV. These shares were acquired from Russell Credit Limited, a fully owned subsidiary of ITC. Dive deeper
Reliance Industries acquired a 74% stake in Navi Mumbai IIA Private Limited for ₹1,628.03 crore, making it a subsidiary while CIDCO retained 26%. Dive deeper
SEBI proposed prohibiting Foreign Portfolio Investors (FPIs) from issuing Offshore Derivative Instruments (ODIs) with derivatives as the underlying asset and restricting the use of derivatives for hedging ODI positions in India. Existing ODIs with derivatives would need to be redeemed within one year of the proposed framework. Dive deeper
India's direct tax collections rose 16.5% to ₹15.82 lakh crore by December 17, 2024. Non-corporate taxes grew 22.5%, outpacing corporate taxes, which increased 8.6%. Securities Transaction Tax surged 85.5% to ₹40,100 crore. Dive deeper
Bharti Airtel prepaid ₹3,626 crores to clear all liabilities for spectrum acquired in 2016, bringing its total spectrum liability prepayments to ₹28,320 crores in 2024. The payment cleared all dues with interest rates higher than 8.65%. Dive deeper
Dixon Technologies hit an all-time high after announcing a joint venture with Vivo India to manufacture smartphones and electronics, with Dixon holding 51%. Dive deeper
SEBI tightened IPO rules for small businesses, requiring profitability in two of the last three years and capping shareholder sales at 20%. It also revamped merchant banking regulations, mandating the separation of unrelated business activities. Dive deeper
Edelweiss Financial Services saw an increase in share price after the Reserve Bank of India lifted restrictions on two group companies, ECL Finance Ltd. and Edelweiss Asset Reconstruction Co., following satisfactory remedial actions. Dive deeper
Va Tech Wabag shares declined after the company announced the cancellation of its ₹2,700 crore order for a seawater desalination plant in Saudi Arabia, as notified by the Saudi Water Authority due to internal procedures. Dive deeper
Shares of NMDC fell following reports that the Karnataka state government plans to increase iron ore mining duties. The state's tax bill approval and the Supreme Court's ruling on retrospective mining taxes could result in significant financial implications for NMDC. Dive deeper
Gems and jewellery exports fell 12.94% to $1.98 billion in November, hit by geopolitical tensions. Cut and polished diamond exports dropped 39.81%, while lab-grown diamond exports declined 42.37%. However, plain gold jewellery exports rose 72.12%. Dive deeper
Accenture reported Q1 revenue of $17.7 billion, exceeding expectations, with new bookings rising to $18.7 billion. IT stocks saw early gains but closed lower. Dive deeper
Ola Electric announced it would expand its network to 4,000 stores nationwide by December 25, 2024, including 3,200 co-located service centres, to make EVs more accessible across India. Dive deeper
What happened across the globe?
The US Fed cut the federal funds rate by 25bps in December 2024, bringing it to 4.25%-4.5%. They now expect two more cuts in 2025, with revised GDP and inflation forecasts, and lowered unemployment projections for 2024 and 2025. Dive deeper
The Bank of Japan kept its key interest rate at 0.25% during its December meeting, with a split vote of 8-1. Despite the US's third rate cut, the BoJ opted for caution, considering risks such as US policies and wage outlook. Japan’s economy showed moderate recovery, with inflation driven by higher service prices. Dive deeper
China kept its benchmark lending rates unchanged at 3.1% for the one-year loan prime rate and 3.6% for the five-year LPR amid economic challenges and pressure on the yuan, following a 25-basis-point rate cut by the U.S. Federal Reserve. Dive deeper
Eurozone wages grew 4.4% YoY in Q3 2024, easing from Q2, with growth slowing in Germany and France, but rising in Spain and Italy. Dive deeper
The UK Manufacturing PMI fell to 47.3 in December 2024, marking the sharpest contraction in 11 months, driven by reduced production and weaker export sales. Dive deeper
China's retail sales grew 3% YoY in November 2024, slowing from 4.8% in October, with declines in cosmetics, clothing, and daily necessities. Dive deeper
Japan's annual inflation rose to 2.9% in November 2024, its highest since October 2023, driven by a surge in food, electricity, and gas prices. Core inflation also climbed to 2.7%, surpassing expectations, while the CPI increased by 0.6% month-on-month, the biggest rise in 13 months. Dive deeper
The Trump transition team proposed repealing a car-crash reporting rule that Tesla opposed, although it remains unclear if the administration will act on the recommendation. Dive deeper
China's capital outflows surged to a record $45.7 billion in November, driven by a weakening yuan and investor concerns over US tariff threats, despite Beijing's stimulus efforts. Dive deeper
Cocoa futures hit a record high due to supply concerns from adverse weather in West Africa, with prices doubling in 2024 amid crop diseases and delayed production. Dive deeper
Honda and Nissan were in early talks to form a joint venture to compete in the electric vehicle (EV) market, with Mitsubishi possibly joining the alliance. No official decisions were made at that time, though both companies faced challenges in the EV sector. Dive deeper
UK annual inflation rose to 2.6% in November 2024, driven by higher prices in recreation, housing, and food. Core CPI rose 3.5%, slightly below expectations, while monthly CPI edged up 0.1%. Dive deeper
The House rejected President-elect Donald Trump's funding plan on December 19, 2024, failing to secure the necessary votes ahead of a government shutdown. Trump's demands faced resistance from Democrats, and the bill was defeated 174-235. Dive deeper
Germany's producer prices rose 0.1% YoY in November 2024, rebounding from a 1.1% decline, driven by higher costs in capital goods and consumer products. Excluding energy, prices rose 1.3%, with a 0.5% monthly rise, the largest since April 2023. Dive deeper
Calendars
In the coming week, We have the following quarterly results and other major events:
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