Budget 2020: Will Indian stock markets continue their bull run in this fiscal year? FE Survey

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January 31, 2020 11:45 AM

Both domestic and global developments swayed the investor sentiment in the financial year 2019-20. The same continues to keep economists and analysts hanging in suspense if the share markets will continue their bull run going forward this fiscal year.

Sensex, NiftyMarket performance can be driven by various factors including global liquidity which we cannot predict

Financial year 2019-20 has been full of ups and downs for Indian stock markets so far, where both domestic and global developments swayed the investor sentiment. The same continues to keep economists and analysts hanging in suspense if the share markets, led by Sensex and Nifty will continue their bull run going forward this fiscal year, according to a Financial Express Online survey. The question “Do you see the Indian markets continuing their bull run in this fiscal year?” saw mixed responses from 13 analysts, investors and economists polled by Financial Express Online. Six participants voted ‘can’t say’; five voted ‘Yes’; while two participants said ‘No’.

Some of the economists were of the view that the direction of the Indian market will depend on the Union Budget 2020. “Economy is at crucial juncture, therefore it depends on budget,” Anita Gandhi, Whole Time Director, Arihant Capital Markets Ltd said. Since a lot has been already happening on a global level, one of the economists said that market performance cannot be predicted. “Market performance can be driven by various factors including global liquidity which we cannot predict,” Bidisha Ganguly, Principal Economist, CII said. However, Madan Sabnavis, Chief Economist, CARE Ratings Ltd said, “Stock market not really linked with economic performance and can still be upwards”.

Amongst the economists who voted ‘No’ in the poll, Ranen Banerjee, Leader Economic Advisory Services, PwC India echoed his views as saying “The global factors will determine the charts. The effects of Coronavirus and any further geopolitical instability in the run-up to the US Presidential elections will have a significant bearing on the market”. However, DK Srivastava, Chief Policy Advisor, EY voted ‘yes’ and said, “That is because compared to the rest of the world, Indian markets are still offering better returns.

Watch Video: What is Union Budget of India?

In the recent times, Indian stock markets have witnessed general elections, slowing economic growth, massive corporate tax rate cuts, tussle between the RBI and the government, resignation of the RBI governor, Union Budget 2019, a total of 110 bps repo rate cut, Ayodhya verdict, and abrogation of Article 370. While globally, developments around Brexit, central banks’ policy decisions, movement in oil prices, US-China trade war, US-China phase 1 trade deal, and so on kept the traders busy so far this fiscal.

On a year-to-date (YTD) basis, S&P BSE Sensex has fallen 0.82 per cent, while broader NSE Nifty 50 index has slumped over 1 per cent. However, in the last one year, BSE 30-share S&P Sensex has delivered 16.25 per cent return while NSE 50-share index Nifty 50 gave 14.43 per cent returns. In the last financial year 2018-19 the Indian stock market ended on a higher note where the S&P BSE Sensex climbed 17 per cent while the broader NSE Nifty 50 index rallied 15 per cent.

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