Recovery Finds A Way

Recovery Finds A Way

A strong recovery was seen in the domestic markets owing to positive rallies by domestic benchmark indices during the latter part of the fortnight. 

During the latter part of the previous fortnight, as China sternly moved forward to implement the national security law in Hong Kong, an escalation in tensions between the US and China was seen. This resulted in the Hang Seng index falling by 1.61 per cent while the Shanghai index registered a mere gain of 0.79 per cent. Later, the focus from that was shifted to the riots that took place in some US cities. These shortcomings were offset by news of various economies opening up and resuming business operations, thus leading to a majority of the world hoping for positive future economic recovery. As a result, European indices such as CAC 40, DAX and FTSE 100 jumped by 8.99 per cent, 8.54 per cent and 3.63 per cent, respectively. Nikkei index soared by 9.26 per cent. Similarly, American indices such as DJIA, S&P 500 and NASDAQ rallied by 6.34 per cent, 5.40 per cent and 4.61 per cent, respectively.

A strong recovery was seen in the domestic markets as well owing to positive rallies by domestic benchmark indices during the latter part of the fortnight. Over the past 15 days, Sensex gained by 12.02 per cent while Nifty rose by 12.39 per cent. The Small-Cap index gained by 10.36 per cent and the Mid- Cap index increased by 10.71 per cent. 

Banking and financial stocks in the domestic markets were impacted by heavy short covering, as a result of which Bankex index gained by 17.37 per cent. The Indian government’s announcement about easing of lockdown restrictions in the country was well-received by businesses as they were able to resume sales, delivery and other business operations. Additionally, on hopes of trade between countries returning to normalcy and overall economic recovery, all sectoral indices traded in a positive territory during the fortnight.

The Realty index gained by 19.48 per cent followed by indices such as Auto, Metal, FMCG and Power gaining by 17.81 per cent, 15.64 per cent, 9.18 per cent and 7.08 per cent, respectively. IT index rose by 6.48 per cent while Healthcare index increased by 6.28 per cent. The trading data for the fortnight shows that FIIs were net buyers to the tune of Rs 7,854.19 crore while DIIs were net buyers to the tune of Rs 10,434.19 crore. WTI crude price increased by 15.23 per cent to USD 36.83 per barrel while Brent crude price increased by 39.44 per cent to USD per barrel during the fortnight.

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