Market Recovery Driven by Positive Global & Domestic Cues: Experts
After three consecutive weeks of losses, the Indian stock market made a strong comeback, closing the week with gains of nearly 2 per cent. This respite from the recent volatility has raised hopes among investors, and experts are pointing to positive global and domestic cues as the key drivers behind this market recovery.
According to market watchers, among the key drivers, the global sentiment improved following reports of a delay in US tariffs and the possibility of further negotiations, which helped stabilise financial markets. The delay in tariffs, initially set to take effect on September 1, has provided a much-needed breather to global markets, which had been reeling under the uncertainty surrounding the trade war between the US and China.
The Indian market, in particular, has been significantly impacted by the global trade tensions, with the Sensex and Nifty indices witnessing a decline of around 5-6 per cent over the past few weeks. However, the recent rally has helped the indices recover some of those losses, with the Sensex closing the week at 38,444 points and the Nifty at 11,556 points.
Another key factor contributing to the market recovery is the improving domestic economic scenario. The Indian economy, despite facing challenges such as a slowdown in growth and a decline in corporate profits, has shown signs of resilience in recent times. The Reserve Bank of India (RBI) has also taken steps to boost economic growth, including cutting interest rates and injecting liquidity into the system.
“Investors are now looking at the Indian market in a more positive light, driven by the improving domestic economic scenario and the potential for further rate cuts by the RBI,” said Ramesh Dembla, a Mumbai-based analyst. “The recent rally is also a testament to the Indian market’s ability to bounce back from volatility, which is a characteristic of emerging markets.”
The recovery in the Indian market has also been driven by the performance of certain sectors, including finance, IT, and pharma. The finance sector, in particular, has seen a significant uptick in recent times, driven by the robust growth of the banking sector and the potential for further rate cuts.
“The finance sector has been a major winner in recent times, driven by the improving economy and the potential for further rate cuts,” said Neeraj Monga, a Delhi-based analyst. “With the RBI expected to maintain a dovish stance, we can expect the sector to continue its upward trajectory.”
The pharma sector has also seen a significant recovery in recent times, driven by the improving demand for generic drugs and the potential for further growth in the sector. The IT sector, which had seen a decline in recent times due to concerns over the global trade war, has also shown signs of recovery, driven by the robust growth of the sector and the potential for further growth.
Overall, the market recovery driven by positive global and domestic cues is a welcome development for investors, who had been worried about the impact of the trade war on the Indian market. While there are still challenges ahead, the recent rally has raised hopes that the Indian market can continue its upward trajectory in the coming months.
