PM’s I-Day speech gives markets fresh lift

Aug 19 2014, 04:20 IST
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SummarySensex hits new high, Nifty crosses 7,800; OMCs top gainers as crude at lowest since Nov.

Indian equities surged more than 1% on Monday with benchmark indices touching new highs and broader markets rising to their highest level in nearly two weeks. Rising for the fifth consecutive session, the Sensex ended at a new high of 26,390.96, up 287.73 points or 1.1%, while the Nifty closed at a record 7,874.25, up 82.55 points or 1.06%. The BSE Mid-cap and Small-cap indices gained 1.8-2.3%.

The trend in Indian markets mirrored a similar move in key Asian and European markets, largely driven by a decline in global crude oil prices on hopes of easing geopolitical tensions.

Dealing room checks show strong buying by foreign institutions in the absence of domestic funds due to a public holiday on Monday. Foreign portfolio investors (FPIs) purchased a net $80-million shares in the cash segment, showed provisional data from stock exchanges. Foreign funds have pumped in close to $650 million this month and roughly $12.3 billion in Indian equities so far this calendar year, Bloomberg data showed.

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Experts said the markets will see further consolidation before moving higher, highlighting various technical and fundamental indicators, including the geopolitical issues in Ukraine and Iraq. “After the rally of last couple of months, we are entering a phase of consolidation. So, it is more likely that the gains from here onwards will be little back-ended rather than completely front-loaded like it was in last six months,” said Nilesh Shah, MD & CEO, Axis Capital.

Shah said markets will positively look at the Prime Minister's speech on the Independence Day. “Clearly, from a market man point of view, 'Made in India' is something that is very comfortable to the market... in India’s case, the execution is more critical than just the intent. So, the steps that the government takes on ground are what the market will be looking forward to,” Shah added.

PM Narendra Modi sent a message to global companies on his maiden Independence Day address with his 'Come, Make in India' tag-line. Modi reiterated the BJP’s manifesto, saying, “If we have to provide more and more employment to the youth, we will have to promote the manufacturing sector. I want to appeal to all the people world over... come, make in India, come, manufacture in India. Sell in any country of the world, but manufacture here.”

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The I-Day speech has to be for the masses, but it did

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