New Delhi: Indian stock markets rose over 1 percent on Monday, led by gains in banking and consumer stocks. The stock market has been bullish since the beginning of April amid signs of improvement in the economy. All eyes are now on US inflation data, which is expected on Wednesday. The Sensex was trading at 61,764.25 points with an increase of 709 points. The Nifty rose 195.40 points to 18,264.40.
Kotak Institutional Equities said in a recent report, “Recent indications on the country’s economic condition have improved. These include things like curbing interest rate hikes and a sound external position in terms of balance of payments. “The market has picked up on these indicators. It is believed that an improvement in the financial condition of the companies could improve their performance in the coming months and boost their growth.
Purchase on behalf of foreign investors
Recent buying by foreign investors (FIIs) has supported the market. Previously, foreign investors had to be sellers in the market for 18 consecutive months. However, now he has started investing again. FIIs bought more than $2 billion in last 5 trading days. While they have invested more than $3.1 billion in Indian equities since March 28.
Expect a stoppage in interest rates
After the Reserve Bank of India (RBI) halted interest rate hikes, investors now hope the US Federal Reserve will follow suit. Recently, the Federal Reserve increased interest rates by 0.25% percent. However, the bank has removed language from its policy statement that previously indicated it could hike rates further.
Even so, however, the possibility of another interest rate hike at the next meeting of the US Federal Reserve in June cannot be completely ruled out. The Federal Reserve’s Jerome Powell said it was not yet certain whether another increase would be needed. The American public still faces high rates of inflation. However, there are concerns such as signs of a slowdown in the economy and the current banking crisis.
Indian Factories and Services PMI
The country’s factory activity rose at the fastest rate in four months in April. This was due to a strong surge in new orders and production. The figures released on Monday are based on a private survey. These figures indicate that demand has remained resilient and portends an encouraging future for consumption.
India’s services sector grew in April, according to data released by S&P Global on May 3. The Purchasing Managers’ Index (PMI) for the sector rose to 62.0 from 57.8 in March. At 62.0, this is the highest level of Services PMI in 13 years.
The government had collected Rs 1.87 lakh crore as Goods and Services Tax (GST) in April. This | This is the highest ever GST collection in a month. Earlier, the highest GST collection record was Rs. 1.68 lakh crore, which was raised in April 2022.
A reasonable assessment
After low returns in the last 18-20 months, Indian stock markets are currently trading at fair valuations. The recent decline has reduced the valuation of Indian equities, making them more attractive compared to their global peers. Due to this Indian indices have outperformed most global indices in April.