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 sudden turnaround has raised hopes among investors and experts, who attribute the market recovery to a combination of positive global and domestic cues.
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 threat of a full-blown trade war between the US and China has been a major concern for investors worldwide, and any development that could lead to a resolution is likely to have a positive impact on market sentiments.
In addition to the global cues, domestic factors also played a crucial role in the market recovery. The Indian economy has been facing challenges, including a slowdown in GDP growth and a decline in consumer spending. However, recent data has indicated that the economy is showing signs of stabilising, with GDP growth expected to pick up pace in the coming quarters.
The Reserve Bank of India’s (RBI) decision to cut interest rates last week also provided a boost to the market. The rate cut is expected to increase liquidity in the system, making it easier for companies to access credit and invest in their businesses. This, in turn, is likely to lead to an increase in corporate earnings and a subsequent boost to the stock market.
Another key driver of the market recovery was the performance of index heavyweights such as the Sensex and Nifty. These indices have been under pressure in recent weeks, but they staged a strong comeback last week, rising by over 2 per cent. This is likely to have a positive impact on investor sentiment, as many investors track these indices as a benchmark for their investment performance.
The recovery in the stock market is also likely to have a positive impact on the overall economy. A strong stock market can lead to an increase in consumer spending and investment, which can help to drive economic growth. Additionally, a strong stock market can also lead to an increase in foreign investment, as investors become more confident in the Indian economy.
Despite the positive cues, experts are cautioning investors against getting too optimistic. The stock market is inherently volatile, and investors need to be prepared for any unexpected developments. According to experts, it is essential to maintain a balanced portfolio and avoid taking excessive risks.
In a statement, a leading market expert said, “While the market recovery is welcome, investors need to be cautious and not get carried away by the recent gains. The market is still vulnerable to global and domestic headwinds, and investors need to be prepared for any unexpected developments.”
Another expert added, “The market recovery is likely to be sustained only if the government and the RBI continue to take steps to support the economy. The government needs to implement policies that can stimulate growth and increase consumer spending, while the RBI needs to maintain its accommodative stance and continue to provide liquidity to the system.”
In conclusion, the market recovery is likely to be driven by a combination of positive global and domestic cues. The global sentiment has improved following reports of a delay in US tariffs and the possibility of further negotiations, while domestic factors such as the RBI’s decision to cut interest rates and the stabilising economy are also contributing to the market recovery. However, experts are cautioning investors against getting too optimistic and advising them to maintain a balanced portfolio and avoid taking excessive risks.
