2 weeks Ago
Last week, markets hit new highs, with Nifty reaching 26,000 and Sensex climbing to 86,000, following the Federal Reserve 's 50 bps rate cut . ETMarkets interviewed Kranthi Bathini, Equity Strategist at Wealthmills Securities, to discuss the outlook for the upcoming week. Excerpts: Last week was all about new highs for the Indian markets, with Sensex crossing 86,000 and Nifty reaching 26,000.
What fueled this surge, and why was India's post-Fed reaction so strong? Kranthi Bathini: The Indian markets have remained firm, as anticipated. Globally, there was consensus around a 25-basis-point rate cut by the Fed, but the surprise additional 25-basis-point cut acted as a catalyst for equity markets worldwide. This unexpected move boosted investor confidence, leading to buying interest globally, including in India.
In India, the positive sentiment is also driven by expectations of an early rate cut, given favorable monsoon conditions and cooling inflation. Some MPC members have even hinted at the need for growth-focused policies. Foreign Institutional Investors (FIIs) are now back, driven by FOMO (Fear of Missing Out) on India's growth story.
Where FIIs once saw Indian valuations as stretched, they now fear missing out on gains and paying more to re-enter. Additionally, softening crude oil prices, now at $67 per barrel, have contributed to the positive momentum in the Indian market. This combination of factors has driven Sensex to 86,000 and Nifty above 26,000.
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So, between 25,800 to 26,200, this is the range we can expect the market to consolidate around. We need to wait, this week we are entering the Q2 earnings season again. And now, the earnings will drive the markets.
Overall, in Q1, there was some slowdown in production and demand due to the general elections. However, this is expected to recover in Q2, which is typically a strong quarter for Indian companies. Watch the full interview here.
Which sectors could perform well in the near term, and is it the right time to invest in them? Kranthi Bathini: IT looks attractive, especially with Accenture's strong results. Large-cap stocks like Infosys and TCS , along with mid-cap stocks like Happiest Minds , are worth watching due to positive revenue guidance. Additionally, with crude oil below $70 per barrel, oil marketing companies are also worth keeping on the radar.
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