Mumbai: Despite the fear of a global trade war due to the ongoing retaliatory action between the US and China over import duty (tariff), the stock market jumped for the fourth consecutive day today due to all-round buying at the local level, thanks to India being relatively less affected by the tariff.
The 30-share BSE sensitive index Sensex rose by 1508.91 points or 1.96 percent to cross the psychological mark of 78 thousand points after thirteen trading sessions at 78,553.20 points and the National Stock Exchange (NSE) Nifty jumped by 414.45 points or 1.77 percent to close at 23851.65 points.
Similarly, the BSE midcap strengthened by 0.56 percent to 41,980.48 points and the smallcap rose by 0.52 percent to 47,946.66 points. During this period, shares of a total of 4106 companies were traded on BSE, out of which 2427 were bought while 1522 were sold while 157 remained unchanged. Similarly, shares of a total of 2977 companies were put up for trading on NSE, out of which 1847 rose while 1047 fell while 83 remained stable.
According to market analysts, amid the ongoing volatility in global markets and fears of trade war, India’s recent better performance has been surprising but encouraging for market experts. When major global markets have been suffering losses since April 02 this year, India is among the few big markets that not only compensated for its losses but also maintained the confidence of investors by closing above the level before April 02. Two major reasons are being given behind this strength.
First, India is a domestic consumption-based economy, due to which it is relatively less affected by external shocks like tariff crisis. India’s economy being less dependent on exports compared to countries like China or the US makes it a safer option during global shocks.
Secondly, expectations of a possible bilateral trade agreement between the US and India are giving additional support to the market. The US considers India as one of its four major trading partners – Britain, Japan, South Korea and India – with whom it can enter into trade agreements on a priority basis. If this agreement happens, India can become an alternative supply source in the event of a US-China trade war, which will boost exports and foreign investment.
Meanwhile, listed stocks in India’s domestic consumption-related sectors such as financial services, telecom, aviation, cement and auto have performed well. Many stocks have touched 52-week highs and some have also made new records. Market analysts believe that this trend may continue in the near future.
Foreign institutional investors (FIIs) are again actively investing in India, especially in domestic consumption-based high-quality large-cap stocks. This shows that in the current global crisis, India is being considered a stable and reliable destination for investment, especially when the prospects of America and China are looking weak. Due to this, there was buying in all 21 groups of BSE.
During this period, Commodities 0.56, CD 0.95, Energy 1.13, FMCG 0.61, Financial Services 2.00, Healthcare 0.91, Industrials 0.57, IT 0.24, Telecom 2.22, Utilities 0.71, Auto 1.01, Banking 2.56, Capital Goods 0.75, Consumer Durables 0.71, Metal 0.25, Oil & Gas 0.98, Power 0.94, Realty 0.49, Tech 1.19, Services 1.47 and Focused IT group shares jumped 0.21 percent. There was a mixed trend at the global level. Due to this, Britain’s FTSE fell by 0.59 percent and Germany’s DAX fell by 0.24 percent. Meanwhile, in Asian markets, Japan’s Nikkei rose by 1.35 percent, Hong Kong’s Hang Seng rose by 1.61 percent and China’s Shanghai Composite rose by 0.13 percent.
