The benchmark indices made yet another set of lifetime highs and the BSESENSEX closed at 25,962.06 points up 3.43% for the week while the NIFTY closed at 7,751.60 points up 3.23%. Significant gains were made in the broad market as well which saw the BSE100, BSE200 and BSE500 gain 3.31%, 3.42% and 3.48% respectively. The BSEMIDCAP gained 3.70% and BSESMALLCAP gained 4.85%. None of the sectoral indices ended in the red. The quarterly gains for the benchmark indices were over 13% which is the best performance in over two years.
FII’s have been the main driving force behind this rally and they invested Rs 62,600 crs or 10.5 billion dollars in the first six months of the calendar year. Domestic institutions have slowed down their sales significantly and were net sellers of 6,848 crs during the same period.
The week ahead has the all-important budget to be presented. The Railway budget would be presented on Tuesday followed by the economic survey on Wednesday. The Union Budget would be presented on Thursday. There are a large number of investors globally waiting for the direction that the government talks about in the budget. Things like exemption limits and tax rates are a minor issue for these investors. They want ambiguity and delay in clearances to go.
With FDI a key for the Modi government to providing new jobs I firmly believe that the government will make development and transparency the key focus in the budget. Investments across sectors would be encouraged andsingle window clearance would be introduced. The abolition of EGOM (empowered group of Ministers and IMG (inter-ministerial group) were done with a two pronged strategy of avoiding delays in decision making and ensuring that a smaller group takes decisions.
The government has already assured the business community that retrospective amendments would be done away with and the ensuing litigation which is harmful to the business environment would be done away with.
Results season for the April-June quarter or the first quarter FY15 will kick in on Friday with IT major Infosys declaring results on Friday the 11th of May. It appears the result would be lost in the budget which would be declared the previous day.
The pre-budget rally is currently on and markets are at a lifetime high. The fate of the markets going forward would depend on the direction the union budget indicates.
Over to the FM and to see what Thursday the 10th of July has in store for us.