Stock market: The journey of bullishness will continue further

Despite the selling of foreign institutional investors and the environment of turmoil at the international level, the Indian stock market has been able to touch new heights. Last week also the stock market made a new record. In the previous article, we had mentioned about the stock market at its peak and the bullish journey ahead, which has been going on since the last two weeks. Continuous rise in stock market has raised concerns among the old investors who have seen the sharp decline in stock markets due to alleged stock scam of Harshad Mehta or the Lehman Brothers crisis in 2008, but continued strength of Indian economy and the growth of Indian companies. On the basis of better performance, it can be said that at present there is doubt of a decline in market due to only one reason, and that is Lok Sabha polls. Since there is still a lot of time left for polls, it can be assumed that even if there is some decline in market due to profit booking, doubts about a long decline are baseless. As far as LS polls are concerned, in this also the BJP govt does not see any major threat due to recent spectacular victory of BJP in three states. Only thing that matters is how many BJP MPs reach Lok Sabha. If results of last five LS polls are studied, it is clear that after every poll result, irrespective of which party forms govt, stock market has performed well. In such a situation, when situation is clear and due to some reason there is a decrease or increase in the number of MPs, it is not believed to make much difference to the health of the stock market. Talking about sectors that will grow this year, possibilities are more visible in IT, Reality and Pharma, in which market leaders of these sectors will definitely lead.

Indian stock markets have continued their upward trend in the last week also. As per data, last week there was an increase of 542.30 points i.e. 0.75 percent in the BSE index and the BSE index increased from 72026.15 points to close at 72568.45 points, while the NSE index improved by 183.75 points i.e. 0.85 percent and the NSE Nifty index increased from 21710.80 points, closing at 21894.55 points. Similarly, there was good improvement in midcap and smallcap indices also. Despite the improvement in the market, foreign institutional investors (FIIs) sold Rs 3901.27 crore last week, while domestic institutional investors (DIIs) responded to this selling by buying Rs 6858.47 crore. Talking about the bullion market, this week the price of gold fell by Rs 150 per ten grams to Rs 64300, while the price of silver remained stable at Rs 74000 per kg.

Regarding market trend this week, traders say there is an improving trend in market, which will continue, but naturally there will be ups and downs. The decision of an MoU worth Rs 45 lakh crore in the recently concluded Vibrant Gujarat Global Summit and the impact of announcement of the ended quarterly results of Reliance Industries will also be visible on market. At present, businessmen find it safe to invest in public sector companies and infrastructure related companies. In their opinion, the shares of selected companies like Mahindra Holidays, BPCL, HPCL, Shipping, Motherson Sumi, Dredging Corporation, IREDA, INOX etc. show an improving trend, but if there are sentiment weeks in the market, then even the considered good stocks may fall. This week, 6 new IPOs on Medi Assist Health Care and SME platform will be available for investors’ applications in the Main Board. Before investing in a new IPO, investors should decide to invest only after studying the financial condition of the company and premium being demanded.

(This is the personal opinion of the author. The author, his family members and acquaintances may have investments in the companies mentioned in the article.)

Vimal Kothari Associate Editor, First India News & Senior Journalist