Indian stocks’ longest rally since August 2014 may continue in near term

Indian stocks extended gains to the ninth straight day Tuesday — the longest winning stretch for the Sensex and the Nifty since August 2014. Receding uncertainty around global trade war and expectations of inflation staying under control, and the latest Met department’s forecast of a normal monsoon have contributed to the renewed strength. The indices have gained 4 per cent in the last nine days. India is the only market that has ended firm in each of the last nine trading days. On Tuesday, the Sensex rose 89.63 points or 0.26 per cent to close at 34,395. The Nifty gained 20 points 0.19 per cent to close at 10,548.

About 60 stocks hit all-time highs on Tuesday though the Sensex was trading 6 per cent below its record highs. ET spoke to three senior market participants on their views on the recent strength:

RAAMDEO AGRAWAL

Joint MD, Motilal Oswal Fin Services

This is the reflection of positive March quarter earnings expectations, sharp bounce back in rural economy and the normal monsoon forecast. Most of the negatives like bank scandals, political uncertainty, rate hikes, and global market volatility have already been discounted by the market.

BHARAT IYER
Head of equities, JP Morgan India

The Indian markets are now moving broadly in sync with the global equities. Hence it will react to any global news. Things are improving in India, but rising crude would remain a challenge. Market will remain volatile and react to the forthcoming earnings.

SUNIL SINGHANIA
Founder, Abakkus Asset Manager LLP

The rally is currently driven by global factors and recovery in rural demand. Indian markets are expected to remain at this level as there are no immediate negative triggers. Expectations of a recovery in earnings are also driving the sentiment. Forecast of good monsoon rainfall will aid consumer demand.