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Market Review

​​​​​OVERVIEW OF MARKET

Domestic markets hit an all-time high during the month as the indices continued its strong up move post the fall caused by demonetization. On the International front, the first phase of the French election has seen Mr Macron emerge as the favourite to become the next President and the final phase of the election is scheduled for May 7th 2017. Further, the US Fed has left interest rates unchanged in its meeting held in May.

The Index of Industrial Production (IIP) for the month of Feb 2017 contracted 1.19% as compared to expansion of 3.28% in Jan 2017. Consumer Price Index (CPI) increased to 3.81% in Mar 2017 from 3.65% in Feb.

In April 2017, Nifty gained 1.4%; Capital Goods, Oil & Gas and Banking sectors’ outperformed while IT, Metals and Pharma underperformed the Nifty. FIIs were buyers for more than Rs 2,394 cr while domestic institutional buyers bought more than Rs 9,918 cr of equity during the month

The Bond yields rose during the month of April 2017. The benchmark 10 year G-Sec (6.97% GOI 2026) closed 27bp higher at 6.96% against 6.69% last month.​

Outlook

RBI expressed concerns over the inflation trajectory going forward and upwardly revised its inflation forecasts for FY18. We believe sticky inflation, along with concerns on global rates will weigh on the bond market. Global developments will remain a key factor to watch out for. ​

Outlook

The pace of Indian equity market is currently determined by overall liquidity conditions and corporate earnings. The recovery post de​monetization and fall in bank interest rates are conducive for demand recovery and high financial savings. Further, market direction would be influenced by global developments and domestic policy measures like GST implementation and Banking sector reforms.

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