Stories
HDFC Bank & IT: Surge or Sell-off After Gap-Up? Market Faces Dual Trends
- •Market exhibits dual trends: Nifty in a bear market, while microcap and smallcap sectors show bullish momentum.
- •FIIs continue significant selling, offloading ₹34,965 crore from Monday to Thursday.
- •Weak US jobs data reduces Fed rate hike probability, yet 10-year bond yields remain stubbornly high.
- •HDFC Bank's Q2 updates are positive, but a major rally is not expected; IT stocks may see stock-specific movements.
- •Today's Bets: Gold, Silver, Muthoot Finance, Manappuram Finance, Bajaj Finance, DMart, Persistent, Coforge, and PSU banks.
Key Questions Answered
Nifty has been on a downward trend for 8 consecutive weeks, breaking its 200 WMA and nearing its 52-week low primarily due to significant and consistent FII selling. FIIs engaged in heavy selling across multiple days, including ₹5,353 crore on Monday, ₹9,980 crore on Tuesday, ₹10,148 crore on Wednesday, and ₹9,484 crore on Thursday.
Even though weaker US non-farm payrolls lowered the probability of an October Fed rate hike from 64% to 22%, the US 10-year bond yield did not drop significantly. This persistent high yield is driven by inflation remaining well above the Fed's 2% target, Brent crude staying above $100 posing inflation risks, and fiscal deficit pressures alongside heavy bond issuances.
Accenture surged 16% on Thursday and dropped 6% on Friday, resulting in a net 10% two-day rally. This upward movement temporarily lifted Indian ADRs by about 3-4% in two days, with stocks like Infosys ADR and Wipro ADR gaining on Thursday before falling on Friday. While IT stocks might show performance, market experts advise being very stock-specific due to differing AI pipelines and fundamentals.
