Market has gained for the sixth consecutive day. Dalal Street has been flying high with the recent streak of highs. In last few months, Indian stock market have struggled to maintain any rally which they have got, but this time things seems to be different. Indian stock market has closed above 19000 levels for the first time in last two months. Globally also, markets are doing well and most of the index were in green.
Stocks are available at the cheaper prices and easing crude prices helped stock market across world to reduce some of their losses. Auto stocks were the buzz of the day and they have been performing well consistently for some time. But all is not well across the globe; Portugal is struggling to come out of the economical problems. Their debt remained under pressure. In china, fear of rate hike is pushing away the investors at the moment.
Banks have also done fairly well in the last few trading sessions but impact of the rising deposit cost on banking margin is expected to hurt them. Indian banks have seen a robust credit growth in last few years. Interest rates have been increasing consistently for last few years. It had helped Banks in maintain their bottom-line earning but as interest rate hike also pushed deposit rates, it can change the equation.
Inflation is not coming down and that may push RBI to come up with few more rate hike this year. That will further reduce the liquidity and increase the deposit rates. It is going to adversely affect banking companies. So though the stock markets have done well in last six days but yet, things are very good for the stock markets in medium term.
Indian markets have underperformed the other peers in the group, so it can be expected to get these kinds of short moves because when market falls, valuation becomes reasonable which attracted a lot of institutional investors which include Foreign Institutional investors.
But as far as this rally is going on traders in stock market can have all the fun but they need to make sure that they should not get trapped in it. One should always keep 30-40 per cent of the total corpus in cash. Mutual funds are the better way to approach these markets for the beginners. Investment in stock market is risky business and it requires a proper monitoring of the investment.
Indian stock markets are moving up as of now in their seventh day. It is important to see where they are stop. The best stock market advice at this stage would be to monitor the market movement carefully and take the call appropriately. Indian share market trend for last one week has been up and it need to be waited and watched before confirming the Bull Run.
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