Moving Steadily Towards 30k, SENSEX Looks Its Sensational Best

Indian stock markets have recovered like phoenix from the brash of BREXIT. After June 24, 2016, the world indices on global arena, the USA indices Dow Jones, S&P 500 and NASDAQ ended on positive note and notched up about 3 per cent. London’s FTSE surged by 6 per cent. German’s DAC and French CAC 40 also recovered by 5 and 3 per cent respectively. Asian Indices (Hang Seng, Nikkei, Shanghai) rose over 4 per cent till date.

India as an emerging economy sustained the shock wave too and pared till date (July 6) the losses experienced post the BREXIT. Indian government took charge by announcing policies that have given confidence to the people. Last fortnight- small cap and mid cap sectors outperformed and were up by 4.22 and 4.45 per cent respectively. At sectoral front, front liner realty sector has climbed up by 5.67 per cent. All other sectors i.e. metal, power, bank, auto and FMCG are in the range of 1.38 to 3.63 per cent except IT sector. Though IT sector turned blood red, we still found some green spots. Around 91 IT companies out of 331 closed above 1 per cent and 22 IT companies closed above 10 per cent returns.

Meanwhile, the union cabinet also made announcement about Shop and Entertainment Act and MMDR (Mines and Minerals Development and Regulation) Act. Shop and Entertainment Act will allow multiplexes, malls, retails shops etc to remain open 24X7. Many retail and entertainment companies like V2 Retail, UFO Moviez, PVR, Shoppers Stop, Inox Leisure gained from the announcement. Government also announced implementation of the 7^th Pay Commission recommendations. This will give much needed boost to infrastructure, auto and cement sectors majorly.

Merging of Indian PSU banks is also on the cards. The central government aims to make six big PSU banks out of 26. Meanwhile, SBI declared merger between SBI and its associate banks. On this note, stocks of State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur surged. Auto sector’s June-2016 sales report is out and many auto makers like Maruti Suzuki India, Hero MotoCorp and Ashok LeyLand disappointed streets while some companies like Mahindra and Mahindra, TVS Motors fared better than our expectations.

Global political and economic uncertainty triggered safe heaven assets- gold and silver. The yellow metal gained almost 26 per cent since January 1, 2016. On the other hand, silver made its own high above Rs 45,000 per kg with 30 per cent up in first six months of 2016.

Monsoon showers are lifting the investor’s sentiments. We see seeds giving way to sprouts .We believe worst is over and there is potential upside to watch out for in the coming earning season. The SENSEX has breached the 27,000 level and next level to watch out for is 30,000 by end of FY17.

Indian stock markets have recovered like phoenix from the brash of BREXIT. After June 24, 2016, the world indices on global arena, the USA indices Dow Jones, S&P 500 and NASDAQ ended on positive note and notched up about 3 per cent. London’s FTSE surged by 6 per cent. German’s DAC and French CAC 40 also recovered by 5 and 3 per cent respectively. Asian Indices (Hang Seng, Nikkei, Shanghai) rose over 4 per cent till date.

India as an emerging economy sustained the shock wave too and pared till date (July 6) the losses experienced post the BREXIT. Indian government took charge by announcing policies that have given confidence to the people. Last fortnight- small cap and mid cap sectors outperformed and were up by 4.22 and 4.45 per cent respectively. At sectoral front, front liner realty sector has climbed up by 5.67 per cent. All other sectors i.e. metal, power, bank, auto and FMCG are in the range of 1.38 to 3.63 per cent except IT sector. Though IT sector turned blood red, we still found some green spots. Around 91 IT companies out of 331 closed above 1 per cent and 22 IT companies closed above 10 per cent returns.

Meanwhile, the union cabinet also made announcement about Shop and Entertainment Act and MMDR (Mines and Minerals Development and Regulation) Act. Shop and Entertainment Act will allow multiplexes, malls, retails shops etc to remain open 24X7. Many retail and entertainment companies like V2 Retail, UFO Moviez, PVR, Shoppers Stop, Inox Leisure gained from the announcement. Government also announced implementation of the 7^th Pay Commission recommendations. This will give much needed boost to infrastructure, auto and cement sectors majorly.

Merging of Indian PSU banks is also on the cards. The central government aims to make six big PSU banks out of 26. Meanwhile, SBI declared merger between SBI and its associate banks. On this note, stocks of State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur surged. Auto sector’s June-2016 sales report is out and many auto makers like Maruti Suzuki India, Hero MotoCorp and Ashok LeyLand disappointed streets while some companies like Mahindra and Mahindra, TVS Motors fared better than our expectations.

Global political and economic uncertainty triggered safe heaven assets- gold and silver. The yellow metal gained almost 26 per cent since January 1, 2016. On the other hand, silver made its own high above Rs 45,000 per kg with 30 per cent up in first six months of 2016.

Monsoon showers are lifting the investor’s sentiments. We see seeds giving way to sprouts .We believe worst is over and there is potential upside to watch out for in the coming earning season. The SENSEX has breached the 27,000 level and next level to watch out for is 30,000 by end of FY17.