Calmness After The Storm

Asian markets remained on a high on growing hopes of fresh US stimulus as well as on increasing hopes of the probability of having a corona virus vaccine by the end of this year 

During the fortnight, global markets remained mostly subdued. Investors were seen adjusting risk exposure ahead of the US presidential election to be held on November 3, 2020. As investors await for key earnings results of Q2FY21, volatility was seen in the US markets as the final debate between US President Donald Trump and his Democratic challenger Joe Biden was held on Thursday, October 22, 2020, which could shift the trajectory of the election. Indices such as DJIA, S&P 500 and NASDAQ increased by 0.17 per cent, 0.54 per cent and 1.29 per cent during the last few weeks. 

Europe continued to witness rising corona virus cases throughout the fortnight. In the European markets, FTSE 100 declined by 0.98 per cent whereas DAX and CAC 40 rose by 0.21 per cent and 1.18 per cent, respectively. The Asian markets remained on a high on growing hopes of fresh US stimulus as well as on increasing hopes of the probability of having a corona virus vaccine by the end of this year. Hang Seng surged by 3.26 per cent, Nikkei rose by 1.54 per cent and Shanghai index increased by 2.94 per cent. Domestic benchmark indices, Sensex and Nifty, jumped by 3.74 per cent and 3.21 per cent, respectively.

During the fortnight, banking stocks staged a remarkable upward momentum. Bankex was up by 8.44 per cent. Meanwhile, IT and realty indices gained by 3.67 per cent and 0.87 per cent. All the other sectoral indices ended the fortnight in the negative territory. Metal index was the biggest loser amongst the sectoral indices declining by 2.50 per cent. Healthcare and power indices fell by 2.13 per cent and 1.91 per cent, respectively. The Auto index was down by 0.96 per cent while FMCG ended flat with a negative bias, down by 0.05 per cent. Excitement in the broader market seemed to have calmed down as investors rushed to book profits gained during the rallies.

The small-cap index fell by 1.74 per cent while the mid-cap index decreased by 1.17 per cent during the last few weeks. Trading data shows that during the fortnight FIIs were net buyers to the tune of Rs 6,883.32 crore while DIIs were net sellers to the tune of Rs 8,757.07 crore. Gold price rose by 0.99 per cent in the last fortnight to Rs 52,950 for 10 grams of 24 carat gold. During the last couple of weeks, WTI crude price gained by 4.69 per cent to reach USD 41.06 for November contracts from USD 39.22. As for Brent crude prices, there is 3.22 per cent increase to USD 42.62 for December contracts from USD 41.29.