Indian equity benchmark indices recorded a new
all time high on Friday led by Information Technology stocks while strong
buying seen in expectation of better than expected Q1 results of the sector.
Sensex and Nifty 50 closed above
80500 and 24500 levels for the first time hitting fresh highs, This sharp rally
was witnessed due to the sharp price increase of the IT stocks. Nifty IT sector
was up by 4.5% which was a highest single day gain in last seven months.
TCS shares gained 6.63% after
posting better than expected earnings on Thursday (11th July, 2024).It made a
new high in last four months. Wipro gained over 4.88%, Infosys gained over 3.5%
which is a five month high, Tech Mahindra gained over 3,04% , HCL Tech gained
over 3,19%.
Top Gainers and
top losers in Nifty 50:
TCS(+6.65%),
Wipro(+4.88%),HCL Tech(+3.30%), Tech Mahindra(+3.04%), Infosys(+3.57%) were the
top gainers.
Asian Paints (-1.01%),
Divi’s Lab.(-0.93%), Maruti(-0.91%),Titan(-0.84%), Hindalco(-0.83%)were the top
losers.
Market
gave a highest closing ever. As the situation is, this run of the 'bull'
doesn't want to stop. Sensex crossed 1000 points for the first time in July,
1990.After 34 years in July it reached 80 times higher. In the last five years
the growth rate has been very high. The index stood in 2019 at 40000.It has
been doubled to 80000 now. Last 10000 points increased in less than 19 months.
Now the question is
"Why the market is so strong recently?" Let's take a look at the
reasons:
India tops surpassing
all countries in terms of GDP growth (8.2% last fiscal).
Despite the strong
heat wave last two months the country is witnessing good monsoon, even it came
late. Whole country is now covered with rain.
If the rainfall is
good as expected, the prices of produces will decrease, which will increase the
hope of reducing interest rate.
Different other
countries including USA are expecting reducing interest rate due to low price
rise recently. Overall, expectations are high.
However, India this
time got the coalition government through the recent Loksabha Election, the BJP
led NDA government is stable at the moment.
Third term of Modi
government has increased the hope of implementing the reform works, the NDA
government is promising to continue it
Confidence in the
government has increased in the investors in the stock market.
In the last quarter,
the financial results of the different companies have been better and the
current quarter they are hoping for better results also.
In the last quarterly
results, non-performing assets of the state-owned banks have been reduced
significantly.
The wave of new IPO
has been increased. Foreign investment firms are buying shares in record
quantity. Domestic institutions including mutual funds are also buying heavily.
Numerous new investors
entered the market. In the last month alone, 43 lakh new demat accounts have
been opened.
Global market is also
booming. Japan's Nikkei set a new record last month hitting a fresh high of
40914.
Manufacturing and
Services sectors are strong enough. PMI in Manufacturing index increased
from 57.5 in May to 58.3.And PMI in Services index increased to 60.5.Above 50
is strong signal.
GST collection in June
increased 8%to Rs.1.74 lakh crore.
Last week, Q1 earning
season already has been started of various companies for the FY 2924-25.Car
sales reduced in June.
All eyes will be on
the budget next 23rd July, 2024.The budget will be presented by Nirmala
Sitaraman after the formation of the BJP led NDA government. She will keep in
mind that Last Loksabha Elections Results were not a clear full hearted
mandate in favor of the BJP while presenting the budget.
In 2019 the government
reduced the corporate tax from 30%to 22%.Since that year there were several
demands of reducing the burden of taxes from the common people's heads. If the
taxes are reduced the common people will get excess cash to spend in products, which
will increase the demand for the products.
Now the time is for
waiting and looking for the budget announcement on 23rd July, 2024. Happy
trading.
Disclaimer:
The information provided on MoneyWiseMind is for educational and informational
purposes only. It is not intended to be financial advice, and you should not
rely on it as such. Before making any financial decisions, you should consult a
licensed financial advisor.
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