Markets End The Week On A Cheerful Note

The Indian markets ended the week on a cheerful note. Both the Sensex and the Nifty closed the week with gains of close to 4.50%. In this week, both the benchmark Indian indices Sensex and Nifty touched an all-time high of 21960 and 6537 respectively.

The week started off on a negative note with the clouds of another war looming over as the Russian troops surrounded Crimea in Ukraine. But the sentiments took a drastic change when the Russian President Vladimir Putin played down the prospect of a war. Owing to this news, the S&P 500 indices also hit an all-time high.

On the other hand, the largest economy in the world is also showing some signs of recovery and that too in a fast pace. It is expected that the US economy for 2014 is likely to post a GDP growth of 3.1% as against 1.9% reported in the year 2013. 

Back to the domestic front, the Indian GDP growth for Q3FY13 came in at 4.70%. This was the fifth successive quarter of a sub 5% growth, which clearly indicates that the slowdown is deeply entrenched. However, there are some silver-lining too. The current account deficit (CAD) of the country narrowed sharply to USD 4.2 billion (0.9% of GDP) in Q3FY14 from USD 31.9 billion (6.5% of GDP) in Q3FY13. This drop can be attributed to the decline in the trade deficit driven mainly by the lesser amount of gold imports.

The other major announcement came from the Election Commission of India as it blew the bugle for the 16th Lok Sabha Election. The largest election in the world will happen in nine phases from April 7, 2014 to May 12, 2014. The results will be declared on May 16, 2014.

Apart from this, what is also notable is that the PMI for both the services and manufacturing in a survey conducted by HSBC stayed well above the 50- mark, showing signs of expansion. The other major factor is that the FIIs have again turned positive as they bought equities worth USD 1 billion in the last fortnight.

Going forward, the markets are likely to witness some positive move as the markets are expecting a pro-development government to take charge in the centre. This will be coupled with the better global sentiments prevailing.