Key Trends in Indian Stock Market During September 2024

September 2024 will likely see several significant events influencing the Indian stock market. Here’s a breakdown of the key factors that shaped the market’s trajectory:

Monthly Auto Sales

Every month, auto companies release their sales numbers. Automakers posted mixed numbers. Maruti Suzuki and Tata Motors recorded a drop of 4% and 8% YoY in August 2024, respectively. While Mahindra recorded a growth of 9% YoY during August 2024. Maruti’s total sales include domestic sales of 1,45,570 units, sales to other Original Equipment Manufacturers (OEMs) of 10,209 units, and exports of 26,003 units. Tata Motors’ domestic sales of MH & ICV, including trucks and buses, stood at 12,008 units in August 2023, compared to 13,506 units in August 2023.

Inflation Data

Every month, the government of India releases inflation data, which is closely watched by investors. If the inflation rate is higher than expected, it could raise concerns about the central bank’s monetary policy stance. Higher inflation might lead to interest rate hikes, which can negatively impact stock prices. Conversely, a lower-than-expected inflation rate could have boosted market sentiment.

India’s retail inflation rate in July 2024 was 3.54%, the lowest level in 59 months. This falls short of the RBI’s (Reserve Bank of India) objective. In urban regions, the inflation rate was 2.98%, while it was 4.10% in rural areas. The Reserve predicted that CPI inflation will be 4.5% in 2024–25, with Q2 being 4.4%, Q3 being 4.7%, and Q4 being 4.3%.

In July 2024, both the All-India Consumer Price Index for Agricultural Laborers (CPI-AL) and Rural Laborers (CPI-RL) increased by 10 points. The annual inflation rates for these indexes were 6.20% for CPI-RL and 6.17% for CPI-AL.

FDI and FPI Flows

The inflow of foreign direct investment (FDI) and foreign portfolio investment (FPI) into India is crucial for the stock market. Positive FDI and FPI flows can provide a much-needed boost to the market, while negative flows can create downward pressure. Investors closely monitor these flows to gauge the overall investor sentiment towards the Indian economy.

Global Events

Several global events during September 2024 could pose an impact on the Indian stock market:

• US Federal Reserve Meeting: Investors worldwide will closely watch the Federal Reserve’s decision on interest rates. A rate hike could have led to a sell-off in global markets, including India.
• Geopolitical Developments: Geopolitical events like the US presidential elections can create uncertainty. Other major geopolitical developments, like trade disputes or conflicts, could influence investor behaviour.
• Commodity Prices: Fluctuations in commodity prices, especially oil and metals, can impact Indian companies and the overall market. The ongoing wars like Russia- Ukraine, and Israel-Palestine are primarily fueling the fluctuation in commodity prices. A rise in commodity prices could increase input costs for Indian businesses, potentially affecting their profitability.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.