India is the first country with a market valued above a $1 trillion to hit a peak this year. After slow growth over the past, Indian equities posted the world’s biggest rally in the last month. 2019 started on a good note for Indian economy with biggest quarterly foreign inflow in six years. About $370 billion in value gained. And now, India’s stock market just hit a record high. The equity benchmark index for the world’s second-largest emerging market rose significantly. SENSEX Stock Market Index reached an all time high of 39056.65 in beginning of April 2019 and have remained steady around the figure since with a closing figure of 38939 today. The SENSEX increased 2419 points or 6.67% since the beginning of 2019, according to trading on a contract for difference (CFD) that tracks this benchmark index from India.
Tensions of rising oil prices, uncertainty regarding general elections and worries over Kashmir have faded. Instead, expectations that Prime Minister Narendra Modi will get re-elected, bets that company profits will recover and a shift in central-bank policy in both the U.S. and India have made investors turn positive. The icing on the cake was bullish views from strategists at foreign research firms. Moreover, banks’ asset-quality problems are now a thing of the past and there are stocks will rally in the lead-up to the vote and raised equities to the equivalent of a buy rating.
There are certainly more events for investors to either buy or sell India stocks for the rest of the year: Results from India’s general elections next month, hints on where corporate profits will go, U.S.-China trade talks and big moves in oil prices.
With the largest democratic elections going on, investors will be looking forward to the formation of a stable government. Yesterday on 8th april, BJP released its manifesto which is very well received and appreciated by business world so is BJP comes to power again, this period of economic boon can be expected to continue.
Recently foreign inflows have seen a great high as global investors purchased a net $8.4 billion of Indian shares in the first three months of the year. That puts the country on track for the biggest annual flood of overseas capital since 2014, when Modi first became prime minister and the S&P BSE Sensex Index hit 54 record highs. General elections tend to be an important influencer of short-term returns and foreign flows into the market and if investors get a market-friendly government, the overseas investment will continue for a month or two.
However, even after so many things going in favor of market growth, some of the security market experts are of opinion that this bullish trend is not going to last long. Sampath Reddy, chief investment officer at Bajaj Allianz Life Insurance Co. said “We believe this pace of inflows will moderate, Last month was exceptionally good, but that can’t be the run rate for the months ahead.”
Neelkanth Mishra, India equities strategist at Credit Suisse Group AG in Mumbai, says such inflows into the nation’s stocks may not be sustainable, even if the global economic momentum turns positive as China stabilizes and central banks don’t change their stance.
For the past few weeks, both the stock market and a gauge tracking its volatility rose at the same time, a rare occurrence that indicates signs of hedging. The NSE Nifty 50 Index and India VIX Index, which tend to go opposite ways, have moved in the same direction five weeks already this year, on track for the highest proportion since 2014.
It is expected that upward movement in Indian stock market will be limited before the elections, but that trading momentum will be restored in the second half of the year. The general consensus is that the India stock market should be up around 10 per cent by the end of the year. It is not likely that the world will go into deep beariash trend despite a weaker global growth outlook. However, markets might not continue to grow at the present speed until better economic data emerges from the major economies like US, China, Japan and the EU.