The Nifty experienced a 3.1% decline from its record high on July 20. Still, a key reason for adding positive points and any apparent pullback is to amplify the evidence of the bottom-up side of the capex cycle, Wood said in his redaction. Fear note on 24 August.
The Indian stock market has come to a respite, he wrote, given that the Indian portfolio of Greed & Fear looked like a vertical rocket rising early last month.
This position can be attributed to the significant presence of interest rate-sensitive assets within the portfolio, including a notable 60% allocation to financial and property stocks. The note said that in recent months, the Indian stock market has been celebrating the end of monetary tightening.
An important piece of data to highlight in the note is that cement companies are currently exhibiting strongest volume growth since Q1 FY2022, year-on-year in Q1 FY2024 Estimated 15-16% running. Said.
The note cited comments by Prateek Kumar, India building materials analyst at Jefferies, that many cement companies expect double-digit demand growth for the industry in FY24. Wood said, “Prateek also said that if cement demand grows in double digits in FY2024, which is possible, it will be the first time in the last three decades that cement demand in India will double for two consecutive years.” will increase in numbers. Note.
As far as cement prices are concerned, they have increased by 14% in the last four years.
The other near-term issue, the note said, is that July’s headline CPI came in above consensus at 7.4% year-on-year, well above the Reserve Bank of India’s comfort zone of 6%.
The main culprit was food inflation, which rose from 4.5% year-on-year in June to 11.5% year-on-year in July, the highest level since April 2020. Nevertheless, core inflation remained at 4.9% year-on-year in July, down from 5.1% year-on-year in June and the lowest level since April 2020, it said.
The money market is still not expecting a further rate hike. The RBI has kept the policy repo rate unchanged in the last three monetary policy meetings, increasing it by 250 basis points from May 2022 to 6.5% in February.
As Greed and Fear notes, gross fixed capital formation as a percentage of Indian nominal GDP is looking encouraging. Gross fixed capital formation to nominal GDP ratio increased from 27.3% in FY11 to 29.2% in FY13, which is the highest level since FY19. The next GDP data for Q1 FY24 will be released on 31 August.
Source: www.bqprime.com
