The markets have touched an all-time high. The path for this was set in the past three months due to a sequence of events. First was the abeyance of the CBDT circular that soothed the nerves of the FIIs, followed by a prudent Budget presented by the government. As the effect of demonetisation was lower than expected, India joined the global reflation trade. Further, the comments of Donald Trump on the strength of the dollar eased the rally on the currency that favoured risk-on into Emerging Markets. The latest one was the increased political stability for the next few years, post the recent State assembly elections. On the liquidity front, the domestic liquidity has been the bedrock for the strength of equity markets. The SIP book of mutual funds is over Rs 50,000 cr. on an annual basis. Pension funds are also investing over Rs 10,000 cr.. Things are increasingly becoming positive on the economic, political and currency front. However, there could be short-term intermittent corrections due to global factors, general fatigue of markets, etc, which is good as it provides opportunity for markets to consolidate.
Indian equities surged in tandem with global stocks last week on the back of Emmanuel Macron winning the first round of the French presidential election on Sunday, 23 April 2017. Closer home, the S&P BSE Sensex advanced 553.10 points or 1.88% to settle at 29,918.40. The Nifty 50 index rose 184.65 points or 2.02% to settle at 9,304.05. The Sensex closed the week below the psychological 30,000 level after surpassing that level in the course of its trading. The BSE Mid-Cap index rose 2.14% and the Small-Cap index advanced 1.35%.
Domestic and global macroeconomic data, quarterly earnings of India Inc., trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the truncated trading week ahead. India's stock markets will remain shut on Monday, 1 May 2017, on account of Maharashtra Day.State-run oil marketing companies (PSU OMCs) and auto stocks will be in focus as PSU oil marketing companies will undertake fuel price revision towards the closing of this month. Auto stocks will be in focus as auto companies will start reporting sales volume data for April 2017, starting from Monday, 1 May 2017.
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