Markets: Once again on path of recovery

After the end of the tug-of-war over the Chief Minister’s name in Maharashtra and the decision by the Reserve Bank of India to reduce the CRR, there was an expectation of increased liquidity in the market, and the Indian stock market surged last week. The return of bullishness in the Indian markets was also significantly contributed by Foreign Institutional Investors (FIIs). Out of the five trading days of last week, FIIs remained buyers in the market for three days, which helped sustain the market’s upward movement.

According to available data, FIIs sold on Monday and Friday, but the selling on Monday was very minimal, and in December, FIIs made a net purchase of Rs 11,933.59 crore. Domestic Institutional Investors (DIIs) also made a net purchase of Rs 1,792.47 crore last week in the month of December, on a weekly basis. This week, predictions about the market’s direction are being made, as GDP figures from the U.S., U.K., and Japan will be announced, which are expected to show improvement and may further boost the Indian markets based on FII activities.

Traders believe that the market will experience fluctuations in December, and in such a scenario, investors are advised to focus on companies with strong fundamentals and not miss partial investment opportunities when they arise. In the current situation, cautious investment in the market will provide opportunities for investors to make profits.

On Friday, the surge in the market helped the Indian stock market remain in the correction phase on a weekly basis. At the end of the previous week, the BSE index saw a correction of 1,906.33 points (2.38%), closing at 81,707.12 points, while the NSE Nifty index rose by 546.70 points (2.27%) and closed at 24,677.80 points. The correction in the market was also reflected in the Midcap and Smallcap indices.

Interestingly, both of these indices have shown more than a 4% increase compared to the main index, which indicates a bullish trend in the market. In such a situation, the highest expectations are still from selective Midcap and Largecap stocks. If we talk about the bullion market, due to weakness in international markets this week, there was a decline in gold and a rise in silver due to demand.

Last week, in Jaipur’s Sarafa market, the price of 24-carat gold fell by Rs 500 per 10 grams, dropping to Rs 78,200 per 10 grams from the previous Saturday’s Rs 78,700 per 10 grams. On the other hand, the price of silver saw a rise of Rs 1,100 per kilogram, improving from Rs 92,000 per kilogram to Rs 93,100 per kilogram.

Due to potential instability in international markets and weak demand, it is expected that gold and silver prices will continue to weaken this week. Regarding this week’s trend, traders are expecting fluctuations in the market.

These are the author’s personal views