It's a high to high. It took just less than six months for the benchmark Sensex to scale a fresh record of over 36,500 early Thursday after a drop in crude oil prices.
Another feel good is a report that India has become the worlds sixth largest economy overtaking France. The 30-share index hit its previous record high of 36,444 on January 29 this year.
The NSE Nifty too reclaimed 11,000-mark for the first time since February 1.
The first half remained tumultuous for domestic equity markets due to trade war woes, outflows by foreign institutional investors, pricey crude and a weakening rupee. However, domestic institutional inflows capped any major downside this year.
As many as 10 stocks in the Sensex pack gave positive return during January 29 to July 11 whereas 19 stocks in the index were in negative territory. ITC remained unchanged.
Kotak Mahindra Bank (up 24 per cent), TCS (24 per cent), HUL (23 per cent), Mahindra & Mahindra (22 per cent), Asian Paints (18 per cent), Infosys (12 per cent), IndusInd Bank (10 per cent), RIL (8 per cent), HDFC Bank (7 per cent) and YES Bank (4 per cent) stood tall among large caps.
On the other hand, Vedanta, Tata Motors, Tata Steel, ICICI Bank, ONGC and Bharti Airtel slumped between 17 per cent and 37 per cent during the same period.
In the BSE Smallcap space, Electrosteel Steels rallied more than 550 per cent since January 29. It was followed by Nalco (up 107 per cent), Indiabulls Ventures (86 per cent) and V-Mart Retail (79 per cent).
Excel Industries, Firstsource Solutions, Seamec, Merck, Take Solutions and KDDL rose 39-78 per cent during the same window.
With a jump of 30 per cent, Mphasis and Page Industries are the stars in the midcap space. Bajaj Finserv, Berger Paints, Exide Industries, Glaxosmithkline Pharma, MRF and Procter & Gamble Hygiene & Health advanced up to 24 per cent since January 29 this year.
The BSE Midcap and Smallcap indices are down around 14 per cent and 18 per cent from their respectively all-time highs, hit in January this year.
On the further movement of markets, Jayant Manglik, President, Religare Broking, said, “Key domestic macro events like May IIP, June CPI inflation data and corporate earnings season will provide further direction to the markets in the near term. Stock or sector specific volatility will remain high. The progress of monsoon, movement of crude oil prices and global developments will continue to be monitored by the market participants. The rising trade tensions between the US and China could induce high volatility across the indices globally. Traders should avoid risky leveraged positions.”
Foreign institutional investors have offloaded shares worth Rs 5,470 crore on a year-to-date basis till July 11 while domestic institutional investors poured more than Rs 64,000 crore.
On the oil dip, Vandana Hari, a market analyst and founder of Vanda Insights, told ETNow, “There was almost a simultaneous plunge in a lot of metals as well as crude yesterday. The biggest bearish factor right now for the crude market is economic headwinds. The trade battle between China and the US, the worlds two largest economies, is set to get far worse before it gets better. That was the biggest factor that knocked crude off its perch yesterday.”
“I would differentiate crude from the other industrial commodities. There are opposing pulls on crude right now. There is a question mark on what happens to global oil demand growth if the Chinese and US trade sparring continues which is a little bit of concern but is very hard for oil markets to quantify. The opposing pulls, the bullish forces on crude, on the other hand are very much intact and Iran is the biggest of them,” she added.
She further said one probably can expect some impact on oil demand growth as a result of the trade wars but on the other hand, there is clear and present danger to Iranian crude exports.
“I do believe that despite the overnight slump, crude will remain supported and probably will start picking up again from this point, but it is going to be several months in my view before we can actually see any tangible impact on demand growth. In the absence of that tangible figure, the bullish factors are going to assert themselves much more,” added Vandana.
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