Recession in stock market a natural process & investors should not panic

Even though the market closed with gains on Friday after the Lok Sabha election results and the subsequent turmoil in the stock market, it is natural that the policies of industrial and economic development will be affected after the formation of a coalition government in the country. In such a situation, investors do not need to regret losing the opportunity to invest in the huge fall on June 4, but rather focus on finding new opportunities. In the NDA meeting held on Friday, consensus has been reached on the name of Prime Minister Narendra Modi and Modi will also take oath as Prime Minister for the third time on Sunday. But even till Saturday afternoon the picture regarding the formation of the Union Cabinet is not clear which is sure to have a direct impact on the stock market. In such a situation, the best situation for investors can be said to be that they need to wait a little more for the decision of a new investment. The reduction in crude oil prices, better GST revenue figures, the country’s GDP growth rate estimated by the Reserve Bank of India to be 7.20 percent, the correct pace of monsoon and normal figures etc. are presenting a bright picture of the Indian economy, but still the upcoming Union Budget is important for the stock market. Since this time there is a coalition government at the center, it should be expected that the coalition government will also be reflected in the Union Budget to be presented next month and the common taxpayers and the general class will also get relief from the stress of the so-called tough announcements to be made by the government in the name of reforms.

After the trading session ended on Friday, there was an improvement of 2732.05 points (3.69%) in the BSE index last week and the BSE index closed at 76693.36 points, while the NSE Nifty index rose by 759.45 points (3.37%) and reached 23290.15 points. The midcap and smallcap index also moved in step with the recent improvement in the market after the Lok Sabha election results and showed improvement, albeit to a lesser extent compared to the original index. The biggest reason for the improvement in the stock market after the massive fall on June 4 was the dispelling of the confusion regarding the formation of the government, but despite this the selling by foreign institutional investors (FIIs) did not stop and last week FIIs again sold shares worth Rs 13718.42 crore, although domestic institutional investors (DIIs) tried to partially counter the selling by FIIs by buying shares worth Rs 5578.71 crore from the market. Talking about the bullion market, this week gold and silver prices remained weak due to the decrease in demand for gold from China and the new international equations created due to the ceasefire proposal between Russia and Ukraine. Comparatively, while gold prices fell by Rs 750 per 10 grams this week, silver prices declined by Rs 2450 per kg and the price of 24 carat gold in Jaipur fell from Rs 73,900 per ten grams to Rs 73,150 per ten grams and silver fell from Rs 93,100 per kg to Rs 90,650 per kg. Regarding the market trend this week, traders say that the ups and downs will continue in the market but investments can be made in companies with strong fundamentals even amidst sharp fluctuations.

(The views expressed by the author are personal)