Tale of the Tape 

Howdy folks.

Nifty (+0.2%) and Sensex (+0.3%) gave up early gains but still ended at record highs as investors digested the Fed’s 50 bps rate cut. Midcaps (-0.7%) and Smallcaps (-1.3%) traded mixed. PS - The Stocktwits India Momentum Index slipped another -0.6%. The advance-decline ratio was in favour of the bears (3:2).

Most sectors ended in the red. Oil & Gas (-1.3%) and PSU Banks (-0.7%) were the top losers. FMCG (+0.6%) and Real Estate (+0.5%) bucked the trend.

What does the Fed’s big cut mean for Indian markets and stocks? Read our top story to find out more.

The electronics manufacturing sector has been on a roll. More details below on how to play the next wave of growth.

Vodafone-Idea, IIFL Finance and Wockhardt saw big movements today. Check out their charts below to find out why.

NTPC (+2%) was the top Nifty gainer after its renewable energy arm filed for a Rs 10,000 cr IPO.

Info Edge rallied +5% intraday after a double upgrade by BofA; the brokerage sees a +14% upside from current levels.

Bajaj Auto (+1%) was in focus after Rajiv Bajaj said the stock could hit Rs 20,000 p/sh. PS - this comes a day after CLSA projected a -40% downside.

Liquor stocks saw a bump after Andhra Pradesh approved a new policy. Tilaknagar Industries, Som Distilleries and United Breweries gained between +3% to +4%. 

Ge T&D India was locked in a -5% lower circuit after two promoter entities said they would sell a 11.7% stake.

Order wins. Ion Exchange was up +3% after bagging contracts worth Rs 161 cr from Adani Power. Garden Reach Shipbuilders rallied +5% intraday before giving up gains after winning a $54 million order from a German firm.

Here are the closing prints:

Market
Fed Goes Big - What Next?

Fed Day has come and gone. The US central bank announced a whopping 50 bps rate cut, its FIRST reduction since March 2020! There’s a lot to unpack here on what it means for Indian markets and sectors. Let’s get into it.

First off, most experts believe the RBI will now cut rates sooner than expected. The central bank says it doesn’t follow the Fed, but in reality it kinda does. Most people were predicting a February 2025 rate reduction, but it’s now possible that Shaktikanta Das may spring a surprise in October itself.

PS - a LOT of this has already been priced in, which explains both the profit-booking this week and today’s sharp fall from the day’s high. But if 2024-2025 sees a global rate cut cycle, there’s two key sectors that will benefit in the long-term.

1) NBFCs and private banks: Cost of funds has been a huge problem for lending. With rate cuts, pressure should ease off. Macquarie is bullish on NBFCs in particular, while Nomura says Shriram Finance, Mahindra Finance and SBI Cards will see a boost to their margins. Another key aspect here is valuations. Since the rate cut is mostly priced in, undervalued stocks will benefit the most. Market expert Hemang Jani says banks have seen a “big underperformer for two years” so they could do well going forward. 

2) IT stocks: Powell clearly stated that he sees no sign of a recession ahead. This is a good sign that the big 50 bps cut will help supercharge the US economy and not just serve as a bandage for a possible downturn. The biggest beneficiary is obviously Indian IT firms all of whom have predicted a stronger FY25. Again, experts say there are different ways to play this theme, with midcaps still looking strong.

Stocktwits Specials
3 Stocks Under Rs 300 - By SEBI RAs

In this week’s video, we will walk through the Top 3 stocks to buy under Rs 300 recommended SEBI RAs on Stocktwits. In the video, we’ll break down the recommendations by SEBI RAs, covering both fundamental and technical analysis.