Street casts worries aside, stocks race back to the top
MUMBAI : From the breath-taking plunge of 4 June, all it took for the stock markets to bounce back and scale fresh highs was three days. Benchmarks and broader market indices on Friday largely recouped their losses from earlier this week, when the markets saw their steepest crash in four years spooked by a narrower mandate for the Bharatiya Janata Party and the National Democratic Alliance in the Lok Sabha election.
Foreign investors bought cash shares after three straight days of heavy selling and closed out a large part of their bearish derivatives bets on rising hopes of political stability and economic continuity, on a day the Reserve Bank of India bumped up its economic growth forecast. The stocks that contributed to Friday's Sensex gains included Reliance Industries, Infosys, Mahindra and Mahindra, Bharti Airtel and HDFC Bank.
RBI, in its June monetary policy on Friday, raised its real GDP growth forecast for India in the ongoing financial year (2024–25) to 7.2% from 7% earlier. “Investors (mainly foreigners) who had turned sceptical post the (election) results on 4 June are buying, with clarity emerging on political stability and economic continuity," said A.
Balasubramanian, managing director and chief executive of Aditya Birla Sun Life MF. “And the rate cut by the European Central Bank is raising hopes among investors that the (US Federal Reserve) could follow sooner or later, resulting in a lower global rate regime, which is beneficial for spurring economic growth," he added.
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