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 surge in the market is attributed to the positive global and domestic cues that have boosted investor sentiment.
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. This development has led to a renewed sense of optimism among investors, who are now looking to invest in equities.
The Indian market, which had been under pressure due to concerns over the US-China trade war and its impact on the global economy, has now received a shot in the arm. The relaxation in global tensions has led to a rally in Indian stocks, with the Sensex and Nifty indices closing at their highest levels in the past week.
Domestic cues have also played a significant role in the market recovery. The Reserve Bank of India’s (RBI) decision to cut the repo rate by 35 basis points in its recent monetary policy review has boosted investor confidence. The rate cut is expected to increase consumer spending and boost economic growth, which is good news for the stock market.
Another positive development is the improvement in the country’s macroeconomic indicators. The GDP growth rate has picked up pace, and the inflation rate is under control. These factors have contributed to a stable economic environment, making it an attractive destination for investors.
The market recovery is also driven by the fact that the valuations of Indian stocks are relatively attractive compared to their global peers. The price-to-earnings (P/E) ratio of the Sensex has fallen to around 20, which is lower than its historical average. This makes Indian stocks an attractive option for investors looking to invest in the emerging markets.
The rebound in the market has also led to a rally in specific sectors such as banking, finance, and technology. These sectors have been major contributors to the market’s growth, and their performance is expected to continue in the near future.
However, experts warn that despite the positive cues, the market recovery is not without its risks. The US-China trade war is still a major overhang, and any escalation in tensions could lead to a further correction in the market. Additionally, the global economy is still facing challenges, and any weakness in the global economy could impact the Indian market.
Despite these risks, experts recommend maintaining a positive approach to the market. They suggest that investors should focus on long-term fundamentals and avoid making impulsive decisions based on short-term market volatility.
The Indian market has always been known for its resilience, and it has a history of bouncing back from crisis situations. With the global and domestic cues now pointing towards a recovery, investors can expect the market to continue its upward trajectory in the near future.
In conclusion, the market recovery driven by positive global and domestic cues is a welcome sign for investors. While there are still risks involved, experts recommend maintaining a positive approach to the market and focusing on long-term fundamentals. With the Indian market expected to continue its upward trajectory, now is a good time for investors to start building their portfolios.
