1. It’s not just the theatres that saw a high last week, courtesy of the continued adventures of MilesMorales aka Spiderman. What else is on an upswing? The Indian equity markets, of course. Let’s catch up.
2. Sensex and Nifty saw record highs as both jumped by 1.2% and 1.4%, respectively. BSE mid cap and small cap had a great week too, with almost a 3% jump. In sectors, realty, healthcare, and consumer durables went up by 3.5%.
3. What’s fueling this rise? It might be the USFed’s decision to not raise rates any further. However, they did indicate their intention of raising rates in their next meeting, if US inflation continues to go up unabated.
4. What are the other key factors contributing to the optimism in the market? For one - inflation is down significantly and was at a 2-year low in May 2023, at 4.3%, compared to 4.7% in Apr. Two - unemployment fell to 7.7% in May, compared to 8.5% in Apr.
5. Adding to that is India’s IIP (Index of Industrial Production), which grew to 4.2% in Apr 2023, compared to 1.7% in Mar, and 6.7% in May last year. This indicates a steady increase in India’s manufacturing.
6. The US markets too benefited, thanks to the Fed’s decision on rate hikes. DowJones was up by 1.2% and NASDAQ was up by 3.2%. Gold also remained flat, thanks to the US rates remaining unchanged.
7. Oil prices were up by 2.5%. There was a surge in demand, thanks to the flat prices in the past few weeks. China’s economic slowdown is a major reason behind the subdued prices. Also, the Chinese Central Bank’s sudden cutting down of interest rates helped fuel the surge.
8. As markets reach new highs, it’s best to remain calm and careful, and of course, stay invested. While there’s always a possibility of unexpected drops, a balanced asset allocation will be your safety net.