Positive Cues Fuel Market Movement

Positive Cues Fuel Market Movement

India’s Gross Domestic Product (GDP) for Q1FY22 grew by 20.1 per cent as compared to the 24.4 per cent contraction recorded in the same quarter a year ago.

Well-fed bulls have once again taken charge as frontline benchmark indices Sensex and Nifty touched fresh all-time highs of 58,194.79 and 17,340.10 on September 3, 2021. Both indices rallied by 4.67 per cent and 5.07 per cent, respectively, during the fortnight. The Mid-Cap and Small-Cap indices bucked the trend from the previous two fortnights, outperforming the benchmarks by a decent margin, gaining 8.52 per cent and 7.74 per cent, respectively. The central government’s health ministry recently announced that more than half of India’s adult population has received at least one dose of the vaccine and 16 per cent have received both.

The cumulative number of doses administered in the country has crossed 66 crore. India’s Gross Domestic Product (GDP) for Q1FY22 grew by 20.1 per cent as compared to the 24.4 per cent contraction recorded in the same quarter a year ago. However, economic activity continues to remain well below the pre-pandemic levels. Foreign direct investment (FDI) into the country rose by more than twofold to USD 17.57 billion during Q1FY22, underpinned by measures such as ease of doing business and favourable policy reforms. Available data indicates that the automobile industry emerged as the top sector with 27 per cent share of the total FDI equity inflows, followed by computer software and hardware at 17 per cent and services sector at 11 per cent.

The IHS Markit Services’ Purchasing Managers’ Index (PMI) rose to 56.7 in August, exhibiting its strongest pace since March 2020. The marked expansion rate recorded was the fastest in one-and-a-half years. Automobile sales for August took a beating as manufacturers cut production amid aggravating global chip shortage. India’s largest carmaker, Maruti Suzuki, reported a 19 per cent decline in total sales in August. The company has also announced price hikes across all models and a 60 per cent production cut in September due to the semiconductor chip shortage. The Auto index ended in the green territory, gaining 3.51 per cent during the fortnight.

Realty index was the top gainer, climbing 12.78 per cent followed by the Power and Metal indices which jumped by 11.93 per cent and 7.26 per cent, respectively, during the fortnight. The IT index was the top loser and underperformed all the other indices, gaining only 1.77 per cent.

Easing pandemic-related restrictions, rapid mass vaccinations, accommodative monetary policy, restricted inflation levels, strong economic data and positive global cues have fuelled this bullish phase. Trading data shows that FIIs were net buyers to the tune of Rs1,869.15 crore while DIIs were also net buyers to the tune of Rs4,961.45 crore during the fortnight.

 

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