Domestic benchmark indices despite ending this week’s last trading session in the red gained half a percent during the course of the week with volatility coming back to haunt investors. With this, Sensex and the 50-stock Nifty are now up over 41% from their March lows. In the coming week, markets are expected to react to June quarter results of listed companies, global stock markets and not to forget the AGM of Reliance Industries. Analysts are still betting on stock-specific actions to steer the market with domestic factors not posing any grave threat in the coming weeks.
The confidence of many investors got jolted when over Rs 30,000 core of their money invested in trusted debt funds of reputed mutual fund (MF) company Franklin Templeton got stuck indefinitely after the world’s leading fund house on April 23, 2020 announced that it will close six of its debt mutual funds schemes. As such funds are less riskier than the equity funds, people often park their short-term money and even emergency funds in debt MF.
The strict lockdown that India imposed might have paved the way for disruptions in businesses and supply chains but apart from that it also helped in the emergence of a new category of businesses — The Essentials. As equity markets climb up and reach significantly higher from their March lows, brokerage firm Edelweiss says that it is time again to focus hard on businesses, and here the new essential category might as well be a new set of defensive stocks. “Classic defensives are well known, but these new ‘Virus defensives’ proved to be supply hedges,” the brokerage firm said in a report. While a nation-wide lockdown was imposed in the last week of March, the government had allowed just a few businesses to run while others were asked to shut shop temporarily, to curb the spread of the coronavirus pandemic.
Indian market will open gap up. Market shall remain positive till 13.45 HRS. After 13.45 HRS, profit booking is possible. On Friday, Indian market shall remain closed. On Monday, gap up opening is possible.
The Sensex rallied by nearly 2,000 points on Friday, as investors celebrated the announcement of a cut in corporation tax rates as also the removal of the enhanced surcharge on capital gains tax and the withdrawal of the tax on buybacks. However, bonds sold-off sharply with the 10-year benchmark yield rising 24 basis points to hit 6.877% during the day on fears the fiscal deficit would widen after the government cut the corporate tax rate. Investors were anxious the space for rate cuts by the central bank would be limited. The yield closed at 6.789%.
Indian stocks surged the most in more than a decade after the government announced deep tax cuts to boost a sagging economy. Investors said the tax cuts will add to profits of companies and boost economic growth.
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