Markets Scale New Peak

The excitement about the formation of a strong and stable government in India was also shared by foreign institutional investors (FIIs) as they turned net buyers with an inflow of Rs. 13,699.92 crore. The domestic institutional investors (DIIs) were net sellers with an outflow of Rs. 4,019.09 crore during the fortnight.

Arming the BJP-led NDA with an overwhelming mandate, the Indian electorate has given Narendra Modi what he asked for. In its second innings, the Narendra Modi government is back with a bigger majority. Now the market is expecting the best in terms of policy reforms, infrastructure development and overall economic growth of the country. Investors’ jubilation over the election results echoed in the markets as the benchmarks Sensex and Nifty traded above their psychologically crucial levels of 40,000 and 12,000, respectively.

BSE Sensex gained 2.33 per cent, while Nifty scaled up 2.20 per cent during the fortnight. The euphoria was broad-based as mid-cap and small-cap stocks also rallied. The BSE Mid-cap index was up by 2.79 per cent and Small-cap index beat the benchmarks by posting 3.88 per cent gain during the fortnight. On the sectoral front, there were some ups and downs, with BSE Realty gaining the most by 7.82 per cent, followed by BSE Power, up by 3.87 per cent and Bankex, up by 3.29 per cent, during the fortnight. The sectors that experienced selling pressure were auto and FMCG. The BSE Auto index dipped by 0.94 per cent, while the FMCG index lost 1.55 per cent.

The international markets continued their downtrend, rattled by the trade dispute between the US and China. The US administration has also launched trade war offensive against its neighbour Mexico, citing illegal immigration as the motive behind the same. This move has hurt the country’s 10-year treasury yield. Besides these challenges, the US government has initiated an anti-trust violation enquiry against major US tech companies, including Google, Apple, thereby hitting US indices very badly. The US tech-based index Nasdaq lost the most and was down by 4.80 per cent, followed by Dow Jones and S&P 500, which were down by 3.35 per cent and 3.37 per cent, respectively.

Similarly, the European indices were in the red. The UK-based FTSE 100 was down by 1.72 per cent, while the German DAX and the French CAC 40 were down by 2.06 per cent and 2.19 per cent, respectively. Following the breakdown of trade negotiations between the US and China, major Asian indices were also in the red. The Hang Seng was down by 3.22 per cent, the Japanese Nikkei was down 4.18 per cent and the Shanghai Composite declined by 0.68 per cent during the fortnight.



The excitement about the formation of a strong and stable government in India was also shared by foreign institutional investors (FIIs) as they turned net buyers with an inflow of Rs 13,699.92 crore. The domestic institutional investors (DIIs), however, took this as an opportunity to book profits and were net sellers with an outflow of Rs. 4,019.09 crore during the fortnight.

Going ahead, the event calendar is a happening one for the market participants. The Reserve Bank and the government will contemplate ways to address the issues of non-performing assets (NPAs) as well as divestment of state-owned enterprises. The annual budget will also be presented this month. In the international market, crude oil prices dipped due to an expected slowdown in the global economy as an impact of the trade war. Brent crude futures were trading near the US$61 per barrel mark, despite an OPEC supply cut. All these positive cues are expected to take the market to new highs.