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 left investors and market analysts alike intrigued, wondering what could have triggered this upsurge. 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 Indian stock market has been under pressure in recent weeks due to various factors, including the ongoing US-China trade tensions, economic slowdown, and global growth concerns. However, the recent rally has given a much-needed boost to investor sentiment, with experts attributing it to a combination of positive global and domestic cues.
One of the primary factors contributing to the market recovery is the improved global sentiment. The delay in US tariffs on Chinese goods and the possibility of further negotiations between the two countries have helped alleviate concerns about a trade war. This development has led to a stabilization of financial markets, which in turn has had a positive impact on the Indian market.
“The global sentiment has improved significantly, and this has had a positive impact on the Indian market. The delay in US tariffs and the possibility of further negotiations have helped reduce concerns about a trade war, which has led to a stabilization of financial markets,” said Rakesh Jhunjhunwala, a renowned Indian stockbroker.
Another key factor driving the market recovery is the domestic economic landscape. Despite concerns about an economic slowdown, the Indian economy has shown signs of resilience, with GDP growth rate at 7.1 per cent in the second quarter of FY20. Additionally, the government’s recent measures to boost infrastructure development and increase spending on key sectors such as agriculture and healthcare have also helped improve investor sentiment.
“The domestic economy has shown signs of resilience, and the recent measures taken by the government to boost infrastructure development and increase spending on key sectors have helped improve investor sentiment. This has led to a positive impact on the market,” said Sanjeev Prashar, Chief Investment Officer at Edelweiss Asset Management.
The recent rally has also been driven by the performance of certain sectors, particularly the IT and pharma sectors. The IT sector has seen a significant resurgence in recent weeks, with top companies such as TCS and Infosys reporting strong quarterly earnings. The pharma sector has also seen a boost, driven by the performance of companies such as Sun Pharma and Dr. Reddy’s Laboratories.
“The IT and pharma sectors have been the key drivers of the market recovery. The strong quarterly earnings reported by top companies in these sectors have helped improve investor sentiment and led to a rally in the market,” said Harish Krishnan, Head of Research at IIFL Securities.
Despite the recent market recovery, experts remain cautious and advise investors to maintain a positive approach. “While the market has recovered, we still need to be cautious and monitor the global and domestic cues. The US-China trade tensions and the economic slowdown continue to be concerns, and investors should maintain a positive approach but not get overly optimistic,” said Jhunjhunwala.
In conclusion, the recent market recovery driven by positive global and domestic cues is a welcome development for investors. While the market has shown signs of resilience, experts remain cautious and advise investors to maintain a positive approach. As the global and domestic economic landscape continues to evolve, it is essential for investors to stay informed and adapt to changing market conditions to maximize their returns.
