Stock Market outlook: Improvement in domestic, global growth outlook are key triggers for Indian equities
If the market experts are to be believed, improvement in domestic and global growth holds the key for the markets and Dalal Street is not an exception to that.
In the wake of rising trade war tension, the Indian indices failed to sustain above the psychological 40,000 and 12,000 levels even after the thumping victory of the incumbent Narendra Modi government. The stock market experts are of the opinion that rise in crude and trade war tension between the US and Mexico was the major reason for that. However, if the market experts are to be believed, improvement in domestic and global growth holds the key for the markets and Dalal Street is not an exception to that.
Speaking on the equity outlook Anoop Bhaskar, Head – Equity, IDFC AMC said, "Post the election verdict, market sentiments have improved even as underlying macros appear mixed with GDP growth coming in at a 20-quarter low, while crude oil fell sharply. The slowdown in consumption across staples and discretionary, mainly autos, was a key concern flagged by most of the companies. Besides, with the election uncertainty out of the way, cyclical made a comeback in the month, most Stable sectors were negative." Anoop Bhaskar further said that of the various factors needed for Cyclicals and Mid and small Cap outperformance, quite a few are in favour namely – favourable valuations, crude prices closer to $60, yields below 7 per cent and last but not the least a stable government at the centre. Improvement in domestic and global growth outlook can be a key trigger for the broader markets going forward through the NIFTY may not see a significant uptick.
However, Prakash Pandey, Head of Research at Fairwealth Securities said, "Overall the market is bullish and is trading in the range of 11,800 to 11,980. Investors are advised to follow buy on dips strategy until the market is trading in this range." However, Pandey reminded stock market investors that now things are going well. Dow rallied more than 1000 points in last four trading sessions."Pandey went on to add that the US President Donald Trump is solving few issues before his Re-Election rallies citing, "Maybe Trump is a genius, after all. What if he finally gets the steep Fed rate cuts he has been demanding? After that, he ends the trade wars, tariffs go to zero, and the stock market surges to new highs -- just in time for the 2020 election!" Prakash Pandey went on to add further that the DIIs are getting the cue from the FII and hence it's the global growth that would give a cue to the domestic investors and hence it would be correct if we say that ímprovement in domestic and global growth holds key to further movement of the Dalal Street."