Hello reader, hope you’ve had a good weekend. The ongoing rally in global stock markets is primarily driven by the surprising and unexpected strength of the U.S. economy ( 2% GDP growth in Q1 23), in spite of the savage 500bp rate hike by the Fed. Global markets which had discounted a US recession by mid-2023 have been proved wrong and the markets are now compensating for the excessive pessimistic discounting in 2022. An important point of distinction between the rally in the US and in India is that the US rally is primarily led by 8 tech stocks while the Indian rally is more broad-based. Sustained FPI flows (Rs 47148 crores in June) are the main driver of the rally in India. The recent surge in FPI inflows has been triggered by the recent ‘Sell China, Buy India’ strategy of the FPIs which, in turn, is being influenced hugely by the anti-China attitude/policy evolving in the US and the developed world. Since the strength of the market momentum is high, the rally can continue; but valuations are getting stretched.
Important points to note:
- Sensex crosses the 65000 mark for the first time ever, today. Similarly, new ATH levels for Nifty and Banknifty seen at 19330 and 45300 levels respectively.
- With the start of trading from July 3 on the NSE International Exchange (NSE IX), Gift Nifty derivative contracts will be available for almost 21 hours – longer than when the SGX Nifty contracts were available on the Singapore Exchange. Nifty derivatives traded on the Singapore Exchange have been moved to NSE IX and renamed Gift Nifty.
- PSE basket along with pharma have been the top gainers in recent weeks.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.