Mixed Data Keeps Investors Guessing!

Gold prices have been on a run globally, with the prices in India hitting a new high. It surged up by 7.19 per cent since the beginning of this month.

Over the last few weeks the markets have remained volatile as the world economy tries to get back to normalcy despite rise in COVID-19 cases. Also, fears existed in the minds of investors as tensions between US-China rose.

During the week, domestic markets witnessed bull sessions as lockdown was eased. Sensex and Nifty rose by 6.83 per cent and 6.54 per cent respectively. SmallCap and MidCap index gained by 1.99 per cent and 2.95 per cent respectively. Amongst sectoral indices, IT index zoomed by 15.90 per cent during the fortnight as the impact of COVID-19 was less than expected and most of the companies have strong project orders to be able to sustain through the current challenging situation. Following it, Auto index, Metal index, Bankex and Power index inched up higher by 7.25 per cent, 4.47 per cent, 3.47 per cent and 2.50 per cent, respectively.

FMCG and Healthcare indices reported a relatively lower growth of 0.20 per cent and 1.86 per cent respectively. Realty index is the only index to end the fortnight in negative down by 0.70 per cent.

On the global front, global indices underperformed compared to domestic indices as in the American indices such as DJIA and NASDAQ declined by 0.99 per cent and 0.82 per cent respectively while S&P 500 registered a mere gain of 0.65 per cent. Amongst European indices, FTSE 100 and CAC 40 fell by 0.82 per cent and 1.57 per cent respectively whereas DAX rose by 1.09 per cent. As data from China showed a positive growth trend post the pandemic, investors feared that the government might soon tighten its eased out financial environment, thus further adding to the belief that there may not be more bull runs in the respective market. As a result Shanghai index tanked by 5.47 per cent while Hong Kong’s Hang Seng index which is dominated by Chinese stocks also witnessed a decline by 2.77 per cent during the fortnight. Japan’s Nikkei index gained by 0.31 per cent.

Looking at the trading data, FIIs were net buyers to the tune of Rs 9,428.4 crore while DIIs were net sellers to the tune of Rs 9,076.87 crore in the last few weeks. Gold prices have been on a run globally, with the prices in India hitting a new high. The yellow metal surged by almost 6.78 per cent to Rs 54,300 for 10g of 24-carat gold in the last few weeks and it is up by 7.19 per cent since the beginning of this month.

The Brent crude oil in the last couple of weeks was up by 2.75 per cent to USD 41.40. Since the beginning of the month Brent crude oil has gone up by 3.96 per cent. Oil demand has improved from the deep trough of the second quarter, although the recovery path is uneven as the resumption of lockdowns in the United States and other parts of the world has capped consumption.