“Volatility provokes the constant dread that some investors know more than we do, making us fearful of ignoring such powerful price movements.” – Peter Bernstein

Eight successive days of gain, but market players are not convinced whether the rally is for real or the market is just trying to trap players with a false breakout. On the positive side, foreign institutional investors are stepping up their purchases steadily.

TCS numbers fell short of market expectations and broker commentary is largely neutral to bearish. CLSA, a bull on the stock, says that healthy orderbook is reassuring for medium-term outlook, while bear JP Morgan says that delay and deferment of discretionary projects because of uncertain macro environment will be a drag on FY24 growth.

Concor

Container Corporation shares rose 1.5 percent after a decent fourth-quarter business update showing total cargo volumes rising close to 5 percent year-on-year and export import (EXIM) volumes up 2.2 percent. On the business front, the EXIM segment is facing headwinds because of the slowdown in global trade, but the domestic segment has been holding up well so far. The bigger trigger for the market, however, was the impending divestment which is now under a cloud because of the problems at the Adani group, widely seen as a frontrunner for the government’s stake. Progress on divestment, more than anything else, will be key to the stock’s performance near term.

Titagarh Wagons

The stock has been steadily making new highs even as railway stocks in general have fallen out of favour with investors. Since mid-June, the shares have almost trebled, as profits are getting better. Titagarh has been a ‘flavour-of-the-season’ in previous bull markets, and long-term investors so far have had little to show for their patience so far. Will this time turn out to be different? At roughly 60 times trailing earnings, the stock exactly is not cheap, though the market cap is less than two times sales. The narrative here is that the company will be one of the key beneficiaries of the government’s plan to roll out some 1,000 Vande Bharat trains over the next five-seven years. On its part, Titagarh says it is looking to transform itself as a ‘railways solutions provider’ and not just a wagon producer, and sees higher revenues from maintenance contracts compared to wagons in the coming years.

Puravankara

The stock gained nearly 3 percent after the fourth-quarter business update showed a 19 percent improvement in realisations and a 21 percent uptick in sales value. CEO Abhishek Kapoor told CNBC TV-18 that business is good in Bengaluru and that soaring rentals are prompting many to buy their own property. The view is in contrast to that of Anarock Property Consultants’ Anuj Puri who told the channel a day before that the Bengaluru realty market has seen a setback because of the slowdown in the technology sector. Also, the buoyancy in the Bengaluru property market in the last couple of years is yet to reflect in the company’s quarterly numbers. Purvankara shares peaked at Rs 150 in November 2021 and is now trading at half that price. Sobha and Godrej Properties spiked following decent Q4 business updates, but have not been able to build on the gains. Companies say interest rates will not hurt demand, and there may be enough takers for homes at sky high prices, but stock market investors seem to be a wary lot.

Exam time

It is not a choppy market that is causing anxiety to fund managers at portfolio management service (PMS) providers. Most of them are cramming for the NISM Series-XXI-B: Portfolio Managers Certification Examination they need to clear by September 2023 as per Sebi rules. And majority of them are finding that convincing clients to invest in funds or navigate turbulent market conditions are far more easier than clearing this test.

“A few fund managers have flunked the exams, because many of the concepts you need to master are hopelessly outdated,” said a PMS Principal Officer. “In some instances, the questions themselves are wrong or have absolutely no relevance to the current market reality. And there is negative marking as well”

The alternative to the exam is the Portfolio Managers CPE Program, but PMS fund managers say there is lack on clarity on whether can be taken by fund managers with 10 years of industry experience or 10 years of PMS industry experience.

Hawkish Fed

Stubbornly high inflation and tight labour markets led Federal Reserve officials to signal they could raise interest rates at their next meeting despite a greater likelihood of a recession later this year, the Wall Street Journal reports.

From wsj.com

“Officials concluded that given the strength of price pressures and the demand for labor, “they anticipated that some additional policy firming may be appropriate” to bring inflation down to the central bank’s 2% goal, the minutes said. They also said they would pay close attention to bank lending conditions as they weigh their next move.”