Markets Stabilising Owing To Stable Global Political Situation

Going ahead, markets will take cues from the direction of the global markets and the corporate results. The Karnataka election outcome will start getting factored into the market’s movement soon and the BJP win may push the markets higher. 

The global markets, after bouts of volatility, have shown signs of stabilising. The global markets rallied taking cues from the stabilising global political situation. The trade war fear between US-China was seen abetting in the past couple of weeks as also the threat of nuclear war between US-North Korea subsiding. These two global events proved to be an incentive for the global equities in the past 15 days. 

The global indices rallied in the past couple of weeks with Nasdaq leading the gains. Nasdaq was up by 3.35 per cent, while S&P 500 was up by 2.53 per cent and Dow Jones Industrial Average gained 2.16 per cent. European markets performed in line with the global markets during the same period with FTSE 100 gaining 3 per cent, while Dax gained by 2.70 per cent while CAC 40 gained 3.43 per cent. 

The Asian markets underperformed the global markets with Shanghai losing 2.02 per cent. Nikkie gained 2.41 per cent while Hang Seng was up by 1.37 per cent.

The key Indian benchmark indices performed in line with the global peers in past couple of weeks. BSE Sensex gained 2.45 per cent and Nifty was also up by 2.45 per cent. The Mid-cap index was up by 1.71 per cent in past couple of weeks while the small-cap index gained 2.19 per cent. The buying is clearly seen in the large caps with the key benchmark indices outperforming the broader markets. 

Among the sectoral indices, IT index was the top gainer in the past 15 days, followed by Metal index which gained 7.10 per cent. The results were in line with the estimates for big IT companies, which was one of the reasons behind such superlative performance. The FMCG and Realty indices were up by 4.40 per cent each. Banking stocks underperformed with the Bankex gaining merely 0.24 per cent. The Power index was up by 1.74 per cent, while the Auto index gained 0.44 per cent. The FIIs remained net sellers to the tune of `4,734.63 crore in the past couple of weeks. The DIIs continued their buying spree in the markets and pumped in `3,326.48 crore. 

Markets were seen reacting to the quarterly results. Corporate India seems to be on a growth trajectory with most companies delivering better performance as compared to the previous quarter. 

Going ahead, markets will take cues from the direction of the global markets and the corporate results. The Karnataka election outcome will start getting factored into the market’s movement soon and the BJP win may push the markets higher. The market participants will watch closely the development on the interest rate front and interest sensitive stocks might be under pressure.