Oh what an end! Sensex logs best March in 7 years to end FY16 on a high

NEW DELHI: The ride was rough for the domestic equity market in the financial year that concluded on Thursday. The 10 per cent gash in the heart of the BSE Sensex is representative of the storms that it had to face all through FY16.

But a 9.2 per cent rally in March, the best monthly performance in four years and the best March returns in seven, meant that the ending was better than the beginning for the BSE benchmark.


A crash in commodity and crude oil prices and rate hike by the US Federal Reserve for the first time in a decade contributed to pulling down the equity market from Cloud 9 that it was at when financial year had begun. At one point, the benchmark plunged 24 per cent from the heady highs seen in March, 2015.

The post-Budget rally was mostly built on expectations of a rate hike by the Reserve Bank of India after the Finance Minister stuck to his mandate to keep fiscal deficit at 3.5 per cent for the coming financial year.

“We expect RBI to do at least a 50 basis points rate cut before the next financial year,” said Sunil Subramaniam, CEO, Sundaram Mutual.

FIIs, too, have made a strong comeback to the market with buying to the tune of $2.2 billion in March so far.

“We are seeing a lot more money coming into emerging markets and then finding their way into our market. FII selling had pinned our market down in January and February,” said Dipan Mehta, Member, BSE & NSE.

Heading into the new financial year, investors are pinning hope on better earnings growth, a quieter Federal Reserve, a stable China and a weakening US dollar.

“The stock market is expected to see an upward momentum in the second half of FY16-17. This will be aided by a pickup in the economy supported by expected money policy easing by the Reserve Bank of India," Siddharth Oberoi, Founder, Prudent Equity told ETMarkets.com.