 "Market hits new high as global oil prices slip")
Indian stock indices gained the most in three weeks to scale record highs on Monday, mainly supported by institutional investor flows and a decline in global crude oil prices. The BSE Sensex rose 1.08 per cent, or 293 points over its previous close, to 27,320, surpassing Wednesday’s 27,140, its previous all-time high. Only four companies in the 30-share index ended with losses. The broader National Stock Exchange Nifty gained 1.08 per cent, or 87 points, to 8,174.
Brent crude oil prices slipped below the $100-a-barrel mark, for the first time in 14 months, on fears of excessive supply amid slowing global demand. The rupee, meanwhile, gained some strength against the dollar on Monday to close at a one-month high of 60.29, against its previous close of 60.40 a dollar.
According to analysts, an appreciation in the rupee’s value and a simultaneous decline in global oil prices will help India improve its macroeconomic situation. “The market outlook is quite bullish. The correction in crude oil prices is a big positive. It will give a boost to our macroeconomy,” said IIFL Chairman & Managing Director Nirmal Jain. “People will now await inflation data and clarity on the monsoon front. From here, things are expected to only improve.”
“A drop in oil prices is a powerful signal of economic revival as far as India is concerned. It will help the government control its current account and fiscal deficits. It will also bring down inflation, which will in turn help reverse the interest-rate cycle,” said KR Choksey Chief Executive Deven Choksey.
Foreign institutional investors (FIIs) on Monday bought shares worth Rs 1,163 crore, while domestic investors were net-sellers to the tune of around Rs 500 crore.
Market experts said foreign investors’ buying momentum was likely to continue, as the US Federal Reserve would leave interest rates untouched for a longer period, with that country on Friday reporting weak jobs growth.
“To date, the Sensex is the best-performing among major global markets this year. Given its strong performance so far, we think the market will be range-bound in the near term and might correct around five per cent over the next two months, as the pace of reforms has been slower than what the market had initially built in. However, we continue to be bullish on the Indian market for the long term and believe buying on dips is a particularly compelling strategy,” said Jyotivardhan Jaipuria, head of research at Bank of Amercia Merrill Lynch, in a client note earlier this month. Some analysts say it is critical for the government to back its promises with action to validate the market optimism.
“The market can rise only so much on sentiment. I don't see a scope for a huge upmove from here. One thing to worry about is the actual change on the ground. It now depends on how quickly the government can act,” said Dalton Capital Advisors Managing Director U R Bhat. He also said the market would keenly watch the Supreme Court verdict on coal block allocations on Tuesday. How quickly the government moves on re-auctioning of these blocks would be important. The market gains on Monday were led by blue-chip banking stocks like State Bank of India and HDFC Bank, oil & gas majors ONGC and Reliance Industries, and technology outsourcing companies TCS and Infosys. “The upside for the market for a one-year period is about 10 per cent. However, there is potential in individual stocks to go up as much as 50 per cent,” said Choksey.
Brent crude oil prices slipped below the $100-a-barrel mark, for the first time in 14 months, on fears of excessive supply amid slowing global demand. The rupee, meanwhile, gained some strength against the dollar on Monday to close at a one-month high of 60.29, against its previous close of 60.40 a dollar.
According to analysts, an appreciation in the rupee’s value and a simultaneous decline in global oil prices will help India improve its macroeconomic situation. “The market outlook is quite bullish. The correction in crude oil prices is a big positive. It will give a boost to our macroeconomy,” said IIFL Chairman & Managing Director Nirmal Jain. “People will now await inflation data and clarity on the monsoon front. From here, things are expected to only improve.”
“A drop in oil prices is a powerful signal of economic revival as far as India is concerned. It will help the government control its current account and fiscal deficits. It will also bring down inflation, which will in turn help reverse the interest-rate cycle,” said KR Choksey Chief Executive Deven Choksey.
Foreign institutional investors (FIIs) on Monday bought shares worth Rs 1,163 crore, while domestic investors were net-sellers to the tune of around Rs 500 crore.
Market experts said foreign investors’ buying momentum was likely to continue, as the US Federal Reserve would leave interest rates untouched for a longer period, with that country on Friday reporting weak jobs growth.
“To date, the Sensex is the best-performing among major global markets this year. Given its strong performance so far, we think the market will be range-bound in the near term and might correct around five per cent over the next two months, as the pace of reforms has been slower than what the market had initially built in. However, we continue to be bullish on the Indian market for the long term and believe buying on dips is a particularly compelling strategy,” said Jyotivardhan Jaipuria, head of research at Bank of Amercia Merrill Lynch, in a client note earlier this month. Some analysts say it is critical for the government to back its promises with action to validate the market optimism.
“The market can rise only so much on sentiment. I don't see a scope for a huge upmove from here. One thing to worry about is the actual change on the ground. It now depends on how quickly the government can act,” said Dalton Capital Advisors Managing Director U R Bhat. He also said the market would keenly watch the Supreme Court verdict on coal block allocations on Tuesday. How quickly the government moves on re-auctioning of these blocks would be important. The market gains on Monday were led by blue-chip banking stocks like State Bank of India and HDFC Bank, oil & gas majors ONGC and Reliance Industries, and technology outsourcing companies TCS and Infosys. “The upside for the market for a one-year period is about 10 per cent. However, there is potential in individual stocks to go up as much as 50 per cent,” said Choksey.