The bullish trend in the markets continued for the third consecutive day. Nifty and Sensex gave up some gains till the end of the session on Monday, but were still up 0.85% and 0.82% respectively. There has been some respite from the fall in commodity prices and hopes of a less rigid stance by central banks to control inflation have risen. Some fall in crude oil prices is also positive for India, improving sentiments.
Deepak Jasani, Head of Retail Research, HDFC Securities Ltd, said, “Declining inflation expectations and easing of COVID-19 restrictions in China lifted global commodities helping sentiments in global markets.” Metals and capital goods sold continuously in the recent past also did a lot.
Experts said a rally in global markets boosted sentiments as the bulls continued the momentum for the third consecutive session. The Nikkei, Taiwan TaiX, Hang Seng and Shanghai Composite all ended with gains of 0.88% -2.35%. Only the Jakarta Composite Index closed down 0.38%.
However, market experts remain cautious till a complete recovery in the economy becomes apparent. The progress of the monsoon will be important for the economy as well. Vinod Nair, Head of Research, Geojit Financial Services, said, “The fall in commodity prices during the recent sessions is lifting the domestic equity market.” A strong revival in the market can be expected only when the economy stabilizes from these uncertainties and foreign institutional. Investors become net buyers, Nair said.
“The change in mood has come as a big relief. However, optimism may remain for a few more sessions before markets turn volatile amid concerns of slowing global economy due to rate hike and continued foreign fund outflows,” said Equity Research (Retail) of Kotak Securities Ltd. Shrikant Chouhan, head of the state, said foreign outflow is a major concern for both the Nairs and the Chouhans. 2.15 trillion in 2022, according to experts, by June 24 and there is no sign of an immediate reversal of the trend.
FPI selling is putting pressure on the rupee, although the fall in oil prices has provided some respite.
Sugandha Sachdeva, Vice President, Commodity and Currency Research, Religare Broking Limited said that the Indian rupee has hit a low of 78.43 amid continuous foreign fund outflow, weak macro data and bearish fears.