The upheaval of the stock markets last year gave BSE investors a chance to add Rs 11 lakh crore to their assets. During this period, the Sensex gained about 15 percent. BSE saw a huge jump in the market capitalization of listed companies. During this period, it jumped by Rs 11,05,363.35 crore to a record level of Rs 1,55,53,829.04 crore. The year was filled with a lot of agitations at both global and domestic levels. After the trade dispute in the US-China, the market of speculation about trade-deal continued to be hot. Meanwhile, at the end of the year, the two countries also agreed to the primary agreement. Domestically, there was concern about GDP growth. Apart from this, big and important decisions like corporate tax cuts also affected the market. According to Ajit Mishra, VP (Research), Religare Broking, the stock markets recorded an upward trajectory due to the rise in stocks of bluechip companies. While the GDP growth rate fell during this period, the markets were not affected much. Earlier in 2018, the Sensex had recorded a gain of 2,011 points. The major stock markets of the country registered significant growth last year. But this growth was limited to stocks of some big groups. During this period, small-cap and mid-cap failed to give returns, while the Sensex and Nifty stocks gave 15 percent returns. According to the participants of the stock markets, 2019 was dedicated to the top companies in the market. During this period, small stocks failed to attract investment. According to research head Rasmik Oja of Kotak Securities, foreign investors contributed to the luster of the markets last year. These investors showed no interest in small stocks.
FPI invested $ 1,440 million (about Rs 1 lakh crore) in domestic equities, which has resulted in double-digit returns from the Nifty. Currently, most of the Nifty returns came after the corporate tax exemption made in September. According to experts, small stocks were mostly bought by local investors, while foreign investors took interest in bluechip stocks. If except January, July and August, foreign investors played a significant role in the stock market boom. Last year, the BSE mid-cap declined by three percent, while the small-cap saw a fall of seven percent. During this period, the 30-share Sensex of the BSE was successful in raising about 5,000 points or 15 percent and also crossed the psychological figure of 40,000. The Sensex made another achievement last year. The BSE index recorded a jump of 1,921 points on 20 September. This was the biggest one-day boom of a decade. On 19 February last year, the Sensex was at a 52-week low, while on 20 September it was able to reach its all-time high of 41,809.96. During this period, on 23 August, the mid-cap stood at 12,914.63 and the small cap at 11,950.86, which was the lower of these two. According to experts, mid-cap and small-cap were seen to be under pressure due to lower economic growth. Apart from this, administrative disturbances in some mid and small cap companies had a negative impact on investors.
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They will provide direction to the market - announcements of the general budget of 2020-21 - Presidential election results in the US - Trade agreement between China and America - Implementation of Brexit and its modalities - Big challenges for the market - Big crude oil prices Fluctuations - Difficulties of the government on fiscal front - Impeachment against Donald Trump - Status of banking and NBFC sector.
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Fundamentals Strong - The domestic market sentiment strengthened after the corporate tax was reduced in September 2019. We believe that the steps taken by the government and RBI to bring the economy back on track will take time to reflect. Despite all the challenges, the long-term outlook is strong in the fundamentals of the Indian economy.
The short-term decline is possible - we expect the economy to improve in the financial year 2020-21 and the market boom will be wider. Currently, the valuation of the shares is high, so the market may fall in the short term. However, longer-term is likely to remain strong.
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Recent decisions will show the impact - We think that the stock market will remain strong in the new year. The reason is that the recent decisions of the government will start showing an impact on the economy. Apart from this, the US Federal Reserve has also taken positive steps. We expect the global economy to slowly return to the track, which will have an impact on the stock market.
The strong trend will continue - The momentum we have seen in the last four months, it may gain momentum in 2020. We are expecting a strong recovery in earnings in the second half of the new year. The reason for this is the strong trend in the global markets and the economic reforms being done by the government.