Flurry Of IPOs To Suck Liquidity From Secondary Markets

The global equity markets seem to be shrugging off all the geopolitical tensions and concerns over slowing economic growth in certain patches of developed economies. Tech stocks in the US are pushing Nasdaq 100 to record highs, even as IT stocks in India continue to underperform.

The global markets had a chance to digest heightened volatility owing to French elections and the Brexit development, along with the volatility in the US dollar.

The crude oil prices remained stable with a downward bias in the last couple of weeks. Locally, for the Indian markets, the announcement of GST rates provided direction to the markets, while investors attempted to adjust their portfolios keeping in mind the GST impact.

Better than expected monsoon this year seems to be cheering the markets and will add to the bullish undertone of the equity markets. While the major benchmark indices BSE Sensex and Nifty remained flat, it was BSE Small-cap index that shined in the past 15 days. The BSE Small cap index was up by nearly 2.44 per cent. On the sectoral front, the Bankex and Metal stocks outperformed the broader market. Bankex was up by 2.51 per cent, while BSE Metal index gained 2.91 per cent in the past couple of weeks. BSE Realty index gained 1.08 per cent on a similar time frame.

The IT stocks were a big drag for the markets, with the BSE IT index falling by nearly 4.08 per cent in last couple of weeks. The other sectoral index that heavily underperformed was the BSE Auto index, which slipped 1.73 per cent.

The Dow Jones Industrial Average (DJIA) was amongst the best performing indices globally, as it gained nearly 3.44 per cent in last couple of weeks. The rest of the markets in developed world remained almost flat, with DAX gaining 0.66 per cent and CAC 40 gaining 0.028 per cent. FTSE was down by 0.62 per cent over the past 15 days. Hang Seng was up by 0.61 per cent and Nikkie was down by 1.03 per cent.

FIIs were net sellers in the Indian markets to the tune of Rs.2403.99 crore, while DIIs were net buyers in the markets, buying stocks worth Rs.2913.48 crore.

Investors will also be keenly watching MSCI’s decision on including the A shares of China to its emerging market index and the same will be beneficial to the second largest equity market in the world. Increasingly, the index funds and ETFs are becoming influential with the amount of active and passive assets managed being benchmarked against these indices. Almost $2 trillion is benchmarked against the MSCI Emerging Market Index.