Tale of the Tape 

Good evening everyone and a happy Independence Day (long) weekend!

Markets were a snoozer today, with the Nifty and Sensex trapped in a boring, range-bound session as investors sat on the sidelines ahead of the Trump-Putin summit. That said, this week’s gains did snap our brutal six-week losing streak, so that’s good news!  Broader markets however saw selling pressure, with Midcaps (-0.3%) and Smallcaps (-0.4%) witnessing small cuts. The advance-decline ratio was in favour of the bears (3:2).

Most sectors ended in the red. Metals (-1.4%) and Oil & Gas (-0.9%) were the biggest losers. IT (+0.4%) and Banking (+0.3%) stocks managed to buck the market trend.

In today’s issue of the Daily Rip, we look at why the Trump-Putin meeting on Friday is super important for our markets, Ashok Leyland’s solid Q1 show, Muthoot’s +10% rally today, top weekly charts and more.

Check out the NSE 500 heatmap:

Market
Moment Of Truth

We’re heading into a rough Independence Day weekend folks! All investor eyes are currently on the Trump-Putin summit that will take place in Alaska on Friday. This is a BIG deal for us, especially considering our economy and stock markets are ALREADY struggling. Here’s what you need to know.

ICYMI - India’s been hit with 50% tariffs for buying Russian oil. In Trump’s eyes, us buying oil from Russia means we support the Ukraine war which is a major no-no for him. And let’s be real, a 50% tariff is brutal. It will shave 1% off our GDP -- say good-bye to 6%+ GDP growth -- and result in massive job losses + pain in the informal economy. Experts say it could also delay the recovery in corporate earnings, which is a big negative. 

That said, it gets worse. US officials have warned that if the Trump-Putin summit doesn’t go well, they could increase our tariffs EVEN MORE. Treasury secretary Scott Bessent said: “It’s put up or shut up time… We put secondary tariffs on the Indians for buying Russian oil. And I could see if things don’t go well, then sanctions or secondary tariffs could go up.”

All of this has taken the sheen off India’s markets. The Nifty (+4% YTD) has severely underperformed Asian rivals including China (+30% YTD), South Korea (+34% YTD) and even Japan (+9% YTD). This gels with a recent BofA survey which shows India went from the most-preferred market to least-preferred in just three months. Yes, global investors are fickle and we can bounce back easily. But it’s a solid signal of the current sentiment around India’s markets.

Big Picture: We don’t bring any of this up to alarm you. But it is important to remember a stock market’s broader performance depends on fundamentals + narrative. Trump’s tariffs hurt us on both counts. The GOI needs to get to work and hopefully with a little luck, Alaska will go our way. As expert Ajay Bagga notes: “The setup is good for a recovery ahead, but the economy and earnings need to show spunk. Once the markets, which are forward looking discounting mechanisms, sense this, expect a strong rally.”

Specials
India’s Biggest Company Trading At A Discount

After giving negative returns in calendar year 2024, Reliance Industries is trading at a huge 15% discount to its 5-year average valuations. Can RIL reverse this underperformance? What are the factors at play and analyst recommendations? Find out in our latest YouTube video, all in under 5 minutes!