scorecardresearchIndian markets outperformed most global peers in July

Indian markets outperformed most global peers in July

Updated: 02 Aug 2022, 09:57 AM IST
TL;DR.
The Nifty rose 8.60% in July, from 15,799.10 to 17,158.25 points. Furthermore, it has risen 13 per cent since its June 15 low of 15,183. In the same time frame, Sensex has gained 8.56%. The month of July was the best for the markets since August 2021 and November 2020, respectively.
Private sector banks posted 47.2 per cent year-on-year (YoY) growth in net profit in the April-June quarter on a sharp fall in provisions and contingencies.

Private sector banks posted 47.2 per cent year-on-year (YoY) growth in net profit in the April-June quarter on a sharp fall in provisions and contingencies.

The Indian equity markets finished the month of July on a higher note, buoyed by lower crude oil prices, a drop in metal prices, and a sharp decline in the Dollar Index to 106. Moreover, the FPIs also turned net buyers and invested nearly 5,000 crore in Indian equities in July after nine consecutive months of relentless selling.

Despite recession fears, high inflation, rate hikes from the US, and a sinking rupee, the market defied all odds and rallied in July.

The Nifty rose 8.60% in July, from 15,799.10 to 17,158.25 points. Furthermore, it has risen 13 per cent since its June 15 low of 15,183. In the same time frame, Sensex has gained 8.56%. The month of July was the best for the markets since August 2021 and November 2020, respectively.

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Nifty Chart - July

The banking, auto, FMCG, and metals sectors provided significant support for the Nifty50 index. In July, the Nifty bank index gained by 13%, while the Nifty metal index increased by 15.37%. In June, the two indices were the biggest laggards. The banking sector performed better in Q1FY23 on a variety of metrics, including credit growth, asset quality, and profitability.

According to media reports, Private sector banks posted 47.2 per cent year-on-year (YoY) growth in net profit in the April-June quarter on a sharp fall in provisions and contingencies.

On the other hand, the IT sector rallied 4.12 per cent, underperforming the benchmark by 4.48. TCS kicked off the June results season, and the company's profit was modest due to an increase in operational expenses. Major IT companies reported higher operating expenses for the June ending quarter due to a rise in employee costs.

In addition to that, the Nifty 50 outperformed major global indices in the last month with the exception of the US.

Major Global Markets % Change in Last one Month
NASDAQ12.35
S&P 5009.10
Nifty 508.60
Sensex8.56
CAC 406.91
Nikkei 2253.71
DAX3.69
FTSE 1003.55
Kospi3.11
Jakarta Composite Index0.12
Shanghai Composite-4.46%

In July, the Dow gained 6.7%, the S&P 500 rallied 9.10%, and the tech-heavy Nasdaq surged 12.35%. US stocks rallied in relief last month, initially, as pessimism reached extreme levels and later on as upbeat earnings reports from major companies and a less hawkish Federal Reserve sustained the move higher.

The major European indices, the Dax, the CAC40, and the FTSE 100, have gained 3.69 per cent, 6.91 per cent, and 3.55 per cent, respectively.

China was the worst, with a slump of 4.46 per cent. While the Jakarta Composite Index increased marginally by 0.12%.

Going forward, market experts anticipate the equity markets to consolidate in August with a positive bias as markets digest the remaining results for the quarter and incremental economic data from the US and Europe, News18 reported.

Santosh Meena, Head of Research, Swastika Investment Ltd., said: "The most important thing that worked out for the Indian market was the resilience of retail investors, especially in the form of SIP. FIIs are turning buyers after relentless selling for more than 8 months and there is a FOMO feeling amongst them as, fundamentally, Indian markets are much better placed compared to many global peers. The cool-off in commodity prices is easing inflation concerns, whereas the Fed is looking less hawkish as the market was fearing. "

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 02 Aug 2022, 09:57 AM IST