When liquidity takes over, common sense takes a backseat; for next 10-12 days, ride the market move: Gautam Shah
What is your view of the world? Lots of new highs, Bitcoin, S&P, Nifty, Nasdaq?
Gautam Shah: Who would have thought – based on common sense and rationality – that markets would be at lifetime highs globally, given all the geopolitics that we have gone through in the recent past? It just tells you that when liquidity takes over, common sense takes a backseat. We saw that in the 2003, 2007 bull markets as well. But the price action has been crystal clear. We have been maintaining a bullish view despite all the uncertainties in the recent past.
The setup continues to be quite solid. The Nifty went through a five-week lull where a lot of people thought that it was distribution, but actually it was consolidation. It was about building a higher base and thereafter, once the Nifty got past 25,200, the momentum only got better. Even now, there are no real signs of topping out. The market is headed towards the previous high of 26,200 and we review it there.
I would say just stay bullish, do not overthink; participate and ride this move, be in the right pockets. It is great to see the broader markets do so well. With the midcap 100, the smallcap 100, all doing well with the largecaps. We seem to be in a bit of a sweet spot and the next 10-12 days should be sorted. But when the earning season kicks off, we will have to just take a step back and review the scene. But till then, all is well.
So, for the next 10-12 days just stay with the market, do not go long, do not go short. But what happens after that if the earning season is not satisfactory, a little bit of a miss, a little bit of a hit? If it is okay, then are we in for a bad patch?
Gautam Shah: It is unlikely because we have handled a lot of stress locally and globally. Let us not forget we went through a bear market for the broader markets between October 24 and March 25 where the average decline in stocks was about 36-37%. So, coming out of that bear market, coming out of some sort of a slowdown on an economic front, I think the numbers should only pick up. From what I learn from our influential clients, it seems it would not be too bad. In fact, it can only get better from here. Given all that RBI has done in the last two, two-and-a-half months, it is a huge tailwind for the corporate world. So, given all that, I do not think there is room for much disappointment and the market should be on track and we should see further upside towards lifetime highs, when we review.
The last time we connected was back in May. You were very positive on Reliance. You said that the Reliance comeback will be very good and we have seen that shaping up. Reliance from close to Rs 1,150 odd is now sitting at Rs 1,500. The stock is retesting the levels of September highs. Why do you believe this time is different for Reliance because some of the brokerages are raising the target. What are you looking for in the technical front?
Gautam Shah: More than the specific stock, the fact is there are too many things firing for the Nifty. We saw the banks do well. We saw Reliance making a strong comeback from the recent lows. That helps the overall market because there are too many factors and sectors we are batting for the Nifty. The Reliance comeback is obviously positive. I do not want to comment on specific stocks, but the entire sector looks quite encouraging and there is a high probability that it goes on to test the previous high. But we really take it from there. More than Reliance and energy, the sector that we have been very bullish on for the last three to six months is financial services and it is going to go on to do bigger things. Valuations are comfortable, fundamentals are excellent, earnings visibility is there and smart money action seems to be there and the charts are in great shape. Financial services is the place to be in and if you have to participate in this market rally, you need to be in financial services, housing finance companies, insurance companies, NBFCs, banks for the next three to six months.
Anything else in terms of individual themes or ideas which are showing signs of sectoral churn?
Gautam Shah: Yes, one thing is very clear that the big winners of the last three years are not doing as well anymore. That is very visible with what has happened in the last three or four months. Among the two pockets that we really like at these levels -- number one is metals. I have said this on multiple platforms in the last many months, I feel that the metals index is setting up for a 15% up move from current levels. A lot of these stocks are beautifully placed on the charts both ferrous and non-ferrous, even though our preference is more non-ferrous. There are big moves of anywhere between 15% and 30% in individual stocks coming. So, metals is a theme that one cannot ignore given the world that we live in currently.
Secondly, if you have to play the real estate story, sometime back it was about power and infra which it still is and we continue to like it, but real estate is also a very good proxy to the India story right now and the entire real estate pack, the top five or seven names look excellent. So, you will be getting excellent risk-reward based long positions there. Just to add one more pocket here is PSU. At a 25,500 index can you get a high single-digit PE stock? PSU banks are right up there. So, the entire PSU basket at such elevated index levels looks very interesting and lucrative.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
16 minutes ago
- Economic Times
US stock market today: Wall Street edges higher as S&P 500 gains on Trump's Vietnam trade deal, Nasdaq jumps, Dow steady amid weak ADP jobs data
S&P 500 rises as President Trump announces new U.S.-Vietnam trade deal, but gains remain modest amid weak June payroll data. Market eyes Thursday's official jobs report and possible Fed rate cut. Dow trades flat, Nasdaq gains 0.7%. S&P 500 rises after Trump reveals Vietnam trade deal, but weak jobs data keeps gains in check- The S&P 500 rose on Wednesday following a surprise announcement from President Donald Trump about a new U.S.-Vietnam trade deal, which he shared via Truth Social. The benchmark index edged up 0.2%, driven by fresh hopes of improving global trade relations. However, the enthusiasm on Wall Street was held back by troubling labor market data. According to the latest ADP payrolls report, the U.S. private sector lost 33,000 jobs in June, the first monthly drop since March 2023, and far below economists' forecast of a 100,000-job gain. The Nasdaq Composite performed slightly better, climbing 0.7%, while the Dow Jones Industrial Average hovered near the flatline, reflecting mixed investor sentiment amid both positive trade developments and concerning economic indicators. The US stock market showed mixed movements today, July 2, 2025, with the S&P 500 and Nasdaq Composite trading higher, while the Dow Jones Industrial Average saw modest gains. The markets responded to President Donald Trump's announcement of a Vietnam trade deal, alongside investor caution over weaker-than-expected private payroll data for June. S&P 500 (via SPY ETF): 618.8 , up 0.2% , up Nasdaq Composite: +0.7% , helped by tech recovery , helped by tech recovery Dow Jones Industrial Average: Up nearly 400 points or ~0.9%, led by industrials and materials Tesla stock surged nearly 6% after reporting 384,000 Q2 deliveries, beating expectations. deliveries, beating expectations. Health-care sector dropped sharply, with one major provider falling around 40%, dragging others in the group. Materials and industrials stocks gained, as investors rotated away from tech and into value sectors. ADP private payrolls report showed a decline of 33,000 jobs in June — the first monthly drop since March 2023. jobs in June — the first monthly drop since March 2023. Economists had expected a gain of 100,000 jobs, leading to speculation about a potential Fed interest rate cut at the July meeting. jobs, leading to speculation about a potential Fed interest rate cut at the July meeting. Eyes are now on Thursday's official non-farm payroll report, forecasted to show 110,000 job gains and 4.3% unemployment. Federal Reserve decision on interest rates could shift if job data continues to weaken. Investors remain cautious, with stock indexes near all-time highs and macroeconomic uncertainty in focus. Trump's tax-and-spending bill, which just passed the Senate, is heading to the House and may influence fiscal policy outlook in the coming weeks. Tariff deadlines and ongoing geopolitical developments are also on the radar for market watchers. President Trump's announcement of a new trade deal with Vietnam provided a brief tailwind to the S&P 500 and investor sentiment. Although the president did not offer details about the agreement, the post alone was enough to shift market focus from ongoing global economic uncertainty to potential international cooperation. This deal could mark a strategic step in balancing Asian trade relations, especially as tensions with China continue to weigh on global markets. However, without specifics, analysts remain cautious. Markets are looking for clarity—such as whether the deal covers tariffs, technology exchange, or broader economic cooperation. The optimism sparked by Trump's trade news was tempered by a stark jobs report from ADP, showing that private payrolls declined by 33,000 last month. This marked the first negative reading since March 2023, and it shocked analysts, who had projected a gain of 100,000 jobs. Ross Mayfield, an investment strategist at Baird, told CNBC, 'We've been seeing a weakening of the labor market for months, and I always wondered if it would take a negative payrolls print to get the [Federal Reserve] to pay more attention.' His comment reflects growing concern that the Fed's focus on inflation may be overshadowing emerging cracks in the labor sector. Investors are now speculating whether Federal Reserve policymakers will shift course. A weak job market could become a trigger for a long-anticipated rate cut, especially as inflation pressures begin to cool. The CME Group's FedWatch tool now shows a 25% chance of a July rate cut, up from 20% just the day before. Sam Stovall, chief investment strategist at CFRA Research, believes that a softer jobs report could clear the path. 'If we end up having a fairly weak employment report, then that could allow the Fed to be cutting rates,' he said. Stovall also pointed out that Fed Chair Jerome Powell had previously mentioned that the central bank would have already cut rates if not for Trump's earlier tariff plans. Despite Wednesday's ADP data, traders are now looking ahead to Thursday's official government jobs report. Economists are forecasting a gain of 110,000 jobs for June. However, if that figure misses the mark in a similar way to ADP's number, markets may begin pricing in more aggressive Fed action later this month. This comes as stocks flirt with record highs, making them particularly sensitive to economic data and Federal Reserve decisions. Wall Street's mixed performance—where the Dow surged 400 points on Tuesday while tech-heavy indexes fell—suggests a market still unsure about its direction. In addition to the trade announcement and economic data, investors are watching Trump's tax-and-spending bill, which narrowly passed the Senate on Tuesday. The measure now returns to the House, where some GOP lawmakers remain opposed. The bill could have broad implications for sectors like infrastructure, healthcare, and manufacturing, depending on how funds are allocated. Meanwhile, the market has seen a rotation out of technology stocks and into more defensive sectors such as materials and healthcare, signaling that investors are bracing for potential economic headwinds. Index Move Today S&P 500 +0.2% Nasdaq +0.7% Dow Jones +0.9% (~400 pts) Tech stocks recovered, led by Tesla Health-care stocks under pressure Investors watch job data and Fed signals closely S&P 500 rose 0.2%; Nasdaq gained 0.7%; Dow was flat. President Trump announced a new U.S.-Vietnam trade deal, but offered no specifics. ADP report showed 33,000 private jobs lost in June, vs. 100,000 expected. Fed may consider interest rate cuts if Friday's official jobs data also disappoints. Trump's tax bill passed Senate, still faces GOP resistance in House. With Trump's trade diplomacy making waves and labor market signals flashing warning signs, all eyes are on the upcoming jobs report and the Federal Reserve's July policy meeting. The next few days could shape the trajectory of both the stock market and U.S. economic policy for the rest of 2025. Q1: Why did the S&P 500 rise after Trump's Vietnam trade deal? Because investor sentiment improved after Trump revealed a new trade agreement with Vietnam. Q2: Could weak jobs data lead to a Fed rate cut? Yes, a drop in payrolls could push the Fed to lower interest rates this month.
India.com
23 minutes ago
- India.com
RBI's big order on CIBIL score! asked credit information companies to update…, will this benefit or harm you?
The Reserve Bank of India (RBI) has issued a major directive regarding CIBIL scores, which are crucial for availing loans. The RBI has mandated that CIBIL scores must now be updated in real-time. It stated that this move will make the loan disbursal process more transparent and efficient, ultimately benefiting customers. RBI Deputy Governor M Rajeshwar Rao has asked credit information companies like TransUnion Cibil to switch to real-time data reporting from fortnightly at present. RBI On CIBIL Score Speaking at a conference organised by Cibil here on Tuesday, Rao said quicker relaying of data from the CICs will help in deepening trust, efficiency and transparency in the system for everybody. 'We must aspire to more frequent updates. Real-time or near-real-time credit reporting will improve underwriting precision, enable timely reflection of borrower actions like loan closures or repayments and deliver a superior consumer experience,' Rao said. Admitting that this entails costs because of investments in technology, process reengineering, and change management, Rao underlined that the benefits will far outweigh the costs. Whom Will It Benefit? This is a significant relief for those seeking home loans, personal loans, or auto loans. In its latest order, the RBI said that information related to CIBIL scores must now be provided in real-time, as opposed to the earlier practice where companies updated it once every 15 days. This decision is expected to offer considerable benefits to loan applicants. Rao also asked the CICs and other companies competing with Cibil, including Experian and CRIF High Mark, to move towards having a 'unique borrower identifier', which is uniform across the system. 'Another key challenge is identity standardisation. CICs rely on credit institutions to provide accurate and validated IDs. Without this, duplication and misreporting remain risks,' he said, explaining the rationale for having such a system. Rao also exhorted the industry to ensure that innovation is 'responsible and accountable', and not at the cost of an individual's rights to data privacy. (With Inputs From PTI)
Time of India
37 minutes ago
- Time of India
Whopping $82.3 billion cost? Donald Trump's tariffs may hit US employers in a big way, says JPMorganChase Institute analysis
US employers could be facing a $82.3 billion bill thanks to US President Donald Trump's sweeping tariff regime, a new report has revealed. This could be a deep financial toll on American businesses, potentially triggering price hikes, layoffs, hiring freezes or lower profit margins. The report, Exposure to tariffs for midsize firms by metro area, published by the JPMorganChase Institute, is among the first to quantify the immediate impact on mid-sized American companies with annual revenues between $10 million and $1 billion, according to an AP report. These firms, employing roughly one-third of the country's private-sector workforce, are majorly dependent on imports from countries like China, India and Thailand, with retail and wholesale sectors seen as especially vulnerable to the import taxes. The findings directly challenge Trump's claims that the burden of tariffs would fall on foreign manufacturers, not US firms. While inflation has so far remained stable, retail giants such as Amazon, Costco and Walmart had anticipated disruption by stockpiling goods before tariffs took effect. The timing of the analysis is crucial, coming almost a week ahead of the July 9 deadline, set by Trump to finalise tariff rates on imports from dozens of countries. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Trade Bitcoin & Ethereum – No Wallet Needed! IC Markets Start Now Undo The deadline came after financial markets were rattled by his April announcements, prompting him to schedule a 90-day negotiating period. Had the April 2 tariffs stayed in place, the same group of firms would have faced a steeper hit of $187.6 billion. Based on the current rates, the average cost per employee would be around $2,080 amounting to 3.1% of a typical company's annual payroll. This also includes employees from firms that do not rely on import goods. 'Our estimation explicitly considers direct costs, defined as costs to firms that physically import goods and pay the import tariffs, and is based on goods trade amounts from 2022, the latest year for which all data are available,' the report said. Higher costs may push for alternate approaches After the import tariffs come into effect the importer may switch to manage these costs through a variety of approaches. These might include raising sales prices or switching to a different supplier subjected to lower or no tariffs. However, it might also not be a feasible option as alternative suppliers may charge higher prices and in some cases, alternate suppliers might not even exist. What comes after the 90-day pause As the 90-day period comes to an end, only the United Kingdom has signed a trade framework so far. India and Vietnam have also said that they are also close to locking in a deal with the US. There is a growing concern that tariffs might push inflation. Goldman Sachs forecasted that US companies are likely to pass along 60% of their tariff costs to consumers. A separate survey by the Atlanta Federal Reserve also suggested that around half of the costs from 10% to 25% tariffs could be shifted to customers without affecting consumer demand. The JPMorganChase report also noted that the tariffs may present an opportunity for domestic manufacturers to strengthen their supply chains. However, given the already narrow margins in retail and wholesale, many companies may have little choice but to pass on additional costs to the customers. 'Everything's going well' When asked on Tuesday about the status of ongoing trade talks, Trump offered a brief reply. 'Everything's going well,' he said. Treasury secretary Scott Bessent defended the administration's strategy, claiming long-serving government officials have been impressed with the progress. 'People who have been at Treasury, at Commerce, at USTR for 20 years are saying that these are deals like they've never seen before,' Bessent told Fox News Channel's Fox & Friends on Tuesday. The Trump administration is also expected to begin mapping out its broader trade deal plans next week. In the meantime, Trump linked the success of the tariff policy to funding a newly passed multitrillion-dollar tax cuts package, which Republicans pushed through the Senate on Tuesday. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
