Market rally likely to continue
Foreign portfolio investors (FPIs) have turned net buyers since February 2017. In June, there have been FPI outflows to the tune of Rs 363 crore so far but this trend is unlikely to sustain feel market watchers.
- Jun 14, 2017,
- Updated Jun 14, 2017 9:18 PM IST
The benchmark Sensex has been continuously trading above 30,000 points since the month of May and has been touched lifetime highs on frequent occasions. The 30-share BSE Sensex has gained 3 per cent over a month. Sumeet Bagadia, Associate Director, Choice Broking says, "Most of the sectors have shown a good movement. Money is flowing in the equities market and globally equities are performing. Some correction is also seen in commodities."
Among the sectoral gainers which mirrored the Sensex were Auto and Bankex with an increase of 4.1 per cent and 3.2 per cent respectively over a month. Other sectoral gainers were BSE Metal and BSE IT with 1.7 per cent and 0.2 per cent growth over the period. The biggest loser was the healthcare index which declined 4.2 per cent over a month, closely followed by BSE Power index with -4.1 per cent and BSE Oil with -3.8 per cent.
Foreign portfolio investors (FPIs) have turned net buyers since February 2017. In June, there have been FPI outflows to the tune of Rs 363 crore so far but this trend is unlikely to sustain feel market watchers. Domestic institutional investors have contributed significantly to the current rally with an investment of Rs 16,331 crore since the beginning of this year. Most analysts believe in the India growth story and expect the country to become the fastest growing major economy again over the next few quarters, overtaking China, as it shakes off the lingering effects of demonetisation.
In the near term, a Fed rate hike could weigh on Indian stocks and lead to further foreign fund outflows but the impact over the medium term is expected to be minimal. Global investors are long on India. The potential for India is "incredible" pointed out Warren Buffett recently.
Given the underlying resilience of the Indian economy, analysts expect the markets to continue to rally. Bagadia expects a further upside movement in the markets in the near-term.
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The benchmark Sensex has been continuously trading above 30,000 points since the month of May and has been touched lifetime highs on frequent occasions. The 30-share BSE Sensex has gained 3 per cent over a month. Sumeet Bagadia, Associate Director, Choice Broking says, "Most of the sectors have shown a good movement. Money is flowing in the equities market and globally equities are performing. Some correction is also seen in commodities."
Among the sectoral gainers which mirrored the Sensex were Auto and Bankex with an increase of 4.1 per cent and 3.2 per cent respectively over a month. Other sectoral gainers were BSE Metal and BSE IT with 1.7 per cent and 0.2 per cent growth over the period. The biggest loser was the healthcare index which declined 4.2 per cent over a month, closely followed by BSE Power index with -4.1 per cent and BSE Oil with -3.8 per cent.
Foreign portfolio investors (FPIs) have turned net buyers since February 2017. In June, there have been FPI outflows to the tune of Rs 363 crore so far but this trend is unlikely to sustain feel market watchers. Domestic institutional investors have contributed significantly to the current rally with an investment of Rs 16,331 crore since the beginning of this year. Most analysts believe in the India growth story and expect the country to become the fastest growing major economy again over the next few quarters, overtaking China, as it shakes off the lingering effects of demonetisation.
In the near term, a Fed rate hike could weigh on Indian stocks and lead to further foreign fund outflows but the impact over the medium term is expected to be minimal. Global investors are long on India. The potential for India is "incredible" pointed out Warren Buffett recently.
Given the underlying resilience of the Indian economy, analysts expect the markets to continue to rally. Bagadia expects a further upside movement in the markets in the near-term.
Also watch: