Shillong, August 21: The momentum behind the global market rally, largely fueled by the narrative of a soft landing in the US economy, seems to be waning, as noted by V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Presently, the primary challenges facing the markets are the escalating dollar value and surging bond yields.
The significant obstacle for equity markets arises from the US 10-year bond yield, which stands at 4.25%. This risk-free return has gained substantial allure, especially when the US’s Consumer Price Index (CPI) inflation has decreased to 3%. The Foreign Portfolio Investor (FPI) selling observed in the cash market throughout August is anticipated to persist in the upcoming period.
Given that the US economy’s developments hold the utmost influence over the market, investors’ attention is centered on the speech by Fed Chief Jerome Powell at the Jackson Hole Symposium scheduled for Friday.
Vijayakumar suggests that long-term investors should leverage market corrections to gradually accumulate high-quality growth stocks, particularly in sectors like banking, capital goods, and automobiles.
On Monday morning, the BSE Sensex exhibited a 234-point rise, reaching 65,183 points. Among the top gainers were Bajaj Finance, Powergrid, NTPC, Wipro, JSW Steel, Kotak Mahindra, Tata Motors, and Bajaj Finserv, all experiencing gains of over 1-2%.
