Bulls Beware

Market Kya Lagta Hai?

Markets are on a hot streak. The Nifty closed up for a fifth straight week, the longest gaining streak since Sept last year. That’s almost too good to be true after the insane first six months of 2022. 🙏

A combination of domestic and global factors has aided this rally. Oil prices hit a six-month low amidst fears of a global recession. This is positive for India as we import 80% of our total oil requirements. Also, the economy remains in top shape despite concerns over steep inflation. GST collections rose 28% YoY to Rs 1.49 lakh cr (2nd highest ever) meanwhile manufacturing activity hit an 8-month high in July.  📊

US inflation cooled off slightly last month sparking hopes of lower interest rate hikes in the future. Solid corporate earnings, abundant rainfall, and return of FII buying have added to the optimism. However, the big question now is – what next? 🤔

Many experts believe that markets have turned overbought – a fancy way of saying prices have gone up way more than they should. So are we headed for a correction? Well, it’s anyone’s guess to be fair. But, simply because something is overbought does not necessarily mean you should sell EVERYTHING and sit on cash. 🚫

Market expert Sandip Sabharwal advises investors to evaluate their portfolios and identify stocks with disproportionate gains. If the valuations have turned extremely expensive then it’s wise to book partial profits. Investors can look to take out 20%-30% of the gains and enter at a lower price or seek other opportunities, according to Sabharwal. 💸

Back With A Bang?

IRCTC is red hot. The stock has rallied +33% from its July lows vs a 19% gain for the broader NSE500 Index. 📈

What’s the deal bro? IRCTC has reportedly invited bids from vendors to monetize rail ticketing data. For those who don’t know, IRCTC has a monopoly in online ticketing and catering services for the Indian Railways. PS. +50% of its revenues come from the e-ticketing business. The company may earn Rs 1,000 cr from this move, said experts. 💰

IRCTC also stands to gain big time from the travel boom. IRCTC is the only company authorized by Indian Railways to offer catering services, and packaged drinking water at stations and trains. The GOI is focused on boosting rail connectivity and aims to launch 400 new “Vande Bharat” trains in three years. More trains = more revenue! Also, recent reports of IRCTC’s inclusion in the MSCI Index is also positive. ✅ 

IRCTC has been an investor’s favorite stock from Day 1. It surged +15x since its listing in October 2019. But a recent issue on the sharing of booking commissions saw the stock drop 30%. The proposal was immediately withdrawn but investors haven’t been so enthusiastic. Will this be the start of a new journey for IRCTC’s stock? 🤞🏻

Movers and Shakers 

Here’s a look at this week’s top Nifty 500 movers. Brightcom Group took the pole position after rallying +21%. 🥇 Hikal (+19%) had the best week since Oct last year. Muthoot Finance (-12%) snapped a four-week gaining streak. TCNS Clothing (-10%) had the worst week since May. 📉 Check out their charts below: