MF Weekly Update: All the Broader Market Indices Traded on a Positive Note
The market followed the previous week’s trend and closed in green. Although, in the opening days, Sensex hits a new high, thereafter RBI’s policy decision to raise repo rate and ongoing trade tension between the US and China traded market down. On Friday, despite weak global cues and uncertainties, good monsoon expectation led the market to trade higher.
This was just the highlights; let’s find out more as to what occurred during the week and analyze what one can expect in the future.
Major Equity Indices Performance
All the broader market indices traded in green during the week. Sensex ended at a weekly gain of 0.59% while large-cap indices; S&P BSE 200 and S&P BSE 100 gained 0.95% and 0.86%, respectively. Mid-cap and small-cap index gained higher by delivering a weekly return of 1.85% and 2.33%, resp.
On Monday, the market rallied to a new high of 37494.40 points against the previous close of 37336.85. There was a strong buying interest in a few of the stocks including ICICI Bank, State Bank of India, and Reliance Industries, and the release of good corporate results was the reason. However, in the afternoon trade, weak global cues kept investors worried. Overall, the market breadth remained strong with 1615 stocks advanced while 1083 declined. The next day, although, in the early-trade, the market traded lower because of cautious stance over RBI’s repo rate decisions in the third bi-monetary policy meeting, still, by the end of the day, it reached to a fresh high of 37606.58 points.
On Wednesday, the market fell from the record high ahead of third bi-monthly monetary policy committee report. RBI’s decision to hike repo rate from 6.25% to 6.50% and weak global cues ahead of trade battle between the US and China dampen the investors’ sentiment. On Friday, the market once again extended its gains as Sensex surged 391 points and closed at 37556.16 due to good monsoon expectations and strong buying counters across all sectors.
Sectoral Indices Performance
On a sectoral note, S&P BSE healthcare was the top performing sector which traded up by 4.61%. Moreover, the buying pressure in consumer durable and energy stocks traded indices higher at a weekly return of 3.60% and 3.55%, respectively. Oil & Gas, metal, FMCG, and Power sector also rallied, rose by 2.47%, 2.34%, 2.23%, and 2.08%, respectively. FMCG companies witnessed good volume growth in their sales with higher consumer discretionary spending. S&P BSE bankex, S&P BSE capital goods, and S&P BSE IT showed a marginal increase of 1.09%, 0.77%, and 0.60%, respectively.
This week, only the auto sector closed down; S&P BSE Auto traded at a marginal decline of 0.61% weekly loss. Although auto companies reported a double-digit sales growth, still passenger vehicle sell fell down. Despite this, two-wheeler and heavy truck witnessed solid growth.
Returns: As on August 3, 2018
Returns: As on August 3, 2018
The increase in RBI’s credit policy rates by 25 bps has put a doubt on the sustainability of the market valuation at current levels, though the neutral stance of RBI is a bit of relief. It will be a difficult choice of RBI going ahead as the impact of rising MSP and fiscal slippage make inflation trajectory uncertain. If the rates are increased any further, then it can hurt the velocity of economic growth.
However, the real impact is something which the time will tell. With this, we are winding up our analysis. As we believe that no time is bad to make SIP investment, thus use this period as an opportunity for your next investment. To seek guidance concerning it, connect with our experts via email or phone call.
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