MUMBAI: Dalal Street investors seem to have heaved a sigh of relief. The Indo-Pak ceasefire announced last weekend, which started a rally on Monday, has added over $300 billion (about Rs 26 lakh crore) to investor wealth, with India’s market cap now at $5.2 trillion (Rs 443 lakh crore).The gains came as the sensex rallied about 3.6% while the Nifty climbed 4.2%. During the same period, foreign funds net pumped in about Rs 15,000 crore into stocks, while domestic funds net infused Rs 9,557 crore, data from BSE and NSDL showed. The rally in stocks outside of the blue-chip pack was even stronger.
Geopolitical risks ease
During the week, global equities extended the relief rally amid the ramp-down of US tariffs on the back of trade deal with the UK and a truce with China, According to Shrikant Chouhan of Kotak Securities, . “Indian markets saw a strong rally this week and were among the major gainers globally as the domestic markets also priced in a ramp-down in geopolitical risks.”In the domestic market, the fall in retail inflation elevated chances of multiple rate cuts by RBI, while the prediction of a normal monsoon kept the hopes of a benign inflation print for several months alive, market players said. “Low crude oil price, expected good monsoon, RBI rate cut, and lower inflation are some of the positive macro factors for the Indian economy,” Chouhan said. “The increase in FPI inflows demonstrates positive sentiment for India, possibly reflecting conviction among investors that India is a relatively better market, in light of global growth challenges.”During the week, smallcap and midcap stocks rallied ahead of largecaps. Compared to the gains in the sensex and Nifty, BSE’s smallcap index gained 9.2%, while the midcap index was up 6.9%. Stocks from the defence sector rallied smartly after PM Modi said that India should manufacture more arms and hardware for the armed forces. Bharat Dynamics gained over 16% during the week, while HAL gained 13.3% and Bharat Electronics 13.5%.Railway stocks also witnessed strong buying interest. RITES was up nearly 27%, while IRCON gained 22%, IRCTC was up 8%, and IRFC rallied nearly 13%.
