Stock Markets : September 2023

All you need to know in the World of Finance: Nifty Soars, US Markets Tumble, and More! September 2023 has been a month filled with thrilling twists and turns in the world of finance.
Let’s take a closer look at some of the key highlights that have shaped this month’s market dynamics.

Nifty Makes History on September 11th

The Nifty index crossed the remarkable milestone of 20,000 points on September 11th, 2023. This historic achievement ignited a surge of optimism throughout the financial markets which in turn resulted in profits for many investors.

Robust flows from the local investors amidst mixed/negative flows from foreigners has helped Nifty achieve this landmark. Successful achievements recently in space and foreign diplomacy by India have boosted sentiments for Indian stocks generally in an era when the global situation is still shaky,” said Dhiraj Relli, MD & CEO, HDFC Securities.

US Stock Market’s Rollercoaster Ride

On September 15th, the US stock market experienced a sharp correction due to uncertainty surrounding the upcoming Federal Open Market Committee Meeting. Investors worldwide were closely monitoring the meeting’s outcome, which had a
significant impact on market sentiment.

While this kind of whiplash can be troubling for investors, experts caution against making any rash decisions when markets fall. Volatility can lead to opportunities to buy more of their favorite stocks and set themselves up for future gains.

Bond Yields and their Impact

Leading up to the Federal Reserve Decision, bond yields saw a notable rise, causing some unease in the stock market. The relationship between bond prices and bond yields is inversely proportional, meaning that when bond yields increase, the cost of borrowing rises. Consequently, this can lead to decreased investment funds, affecting stock prices.

Rising bond prices are a challenge for existing bondholders because of the inverse relationship between bond yields and bond prices. When yields rise, prices of current bond issues fall. This is a function of supply and demand. When demand for bonds declines, issuers of new bonds must offer higher yields to attract buyers, reducing the value of lower-yielding bonds already on the market. This environment hit bondholders particularly hard in 2022, with the Bloomberg U.S. Aggregate Bond Index generating a total return of -13.01%.

GMR Power’s Remarkable Performance

GMR Power emerged as a standout performer in September, with its stock price doubling during the month. This incredible feat was fueled by several factors, including the company’s receipt of a significant Letter of Award for a smart metering project.

This award is for the implementation of a smart metering project in the Dakshinanchal region, covering Agra and Aligarh zones in Uttar Pradesh. Under this project, GSEDPL will be responsible for the installation, integration, and maintenance of 25.52 lakh smart metres in these areas. The total contract value for the Agra and Aligarh Zones amounts to approximately ₹2,469.71 crore. The company said the issuance of the LOA follows a competitive e-tender process conducted by UP Discoms for various regions in Uttar Pradesh, in which GSEDPL emerged as the successful bidder. The smart metering project will span over a ten-year period.

The September Effect

This is a phenomenon which states that the month of September is generally gloomy and has ended up in slightly negative returns over the past years. But, here we leave food for thought. Is It Still Relevant? Is it just correlation or causation? Let us know your views in the comments.

A Flourishing IPO Market

This September has also seen a flurry of activity in the IPO arena, with approximately 17 companies making their stock market debut. The final week of September witnessed a surge in Initial Public Offerings (IPOs) from several Main and Small Medium-Sized Enterprises (SME) companies on the stock market. This follows last week’s listings of three mainboard IPOs: Jupiter Life Line Hospitals, EMS Limited, and RR Kabel.

It’s clear that this month has been anything but ordinary in the world of finance. Stay tuned for more exciting updates as we journey further into the dynamic world of finance.

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