Geopolitical issues, monsoon to be triggers for stock markets

The 30-stock Bombay Stock Exchange (BSE) Sensex continued to rise this week too. It rose 1.29 per cent and closed the week at 26,419.55 points.

"Stock markets remained buoyant with the Nifty closing above 7,900 for the first time. Mid-caps outperformed the larger peers, indicating greater interest from non-institutional players. Buying by foreign institutional investors (FIIs) in the cash segment was subdued.

Reduced geo-political tensions and optimism about economic growth buoyed sentiment," says Dipen Shah, head, Private Client Group Research, Kotak Securities.

The markets opened 50 points higher on Monday, August 18. The next day, it rose merely 29 points, after being extremely volatile during the day.

This was followed by a fall of 104 points on Wednesday. It rose 45 points on Thursday, when the Nifty made a fresh high. The last trading day of the week saw the index rise by 59 points.

Among Group A companies, the top gainers during the week were Jubilant Foodworks (16.69%), TTK Prestige (14.13%), Berger Paints (14.09%), Bharat Petroleum (13.85%) and Hindustan Petroleum (13.25%).

The top losers were Bhushan Steel (30.04%), Engineers India (13.78%), Jaiprakash Associates (12.04%), Unitech (11.05%) and Jaiprakash Power Ventures (8.62%).

On Friday, the last trading day of the week, out of 3,129 stocks that trade on the BSE, 117 remained unchanged, 1,465 rose and 1,547 fell.

Vinod Nair, head, Fundamental Research, Geojit BNP Paribas Financial Services, says, "The Nifty opened on a positive note today (on Friday) and tested a new all-time high at 7,929.05 on support from government banks and IT stocks."

FIIs made a net investment of Rs 20,900 crore, including in debt and equity markets.

Rajsekhar, senior research analyst, HBJ Capital, says the markets will be positive the next week too. "The negatives are waning across the globe. Every market around the globe is in a bull phase and Indian market is an outperformer compared to global peers."
 
Adding a word of caution, Rajsekhar says, "Markets on Monday should open with a gap-up. This time it will be a runaway rally, but not beyond the 8,000-mark."

"Expectation of interest rate movements in the US and fiscal reforms in India will continue to drive markets in the medium to long term. In the short term, geo-political issues and monsoons will be the triggers," says Shah of Kotak.