Since the beginning of this year 2019, Indian markets have seen markets mostly rolling upwards with Sensex gaining almost 1,100 points on upside from close of year 2018 at around 36,000 mark to 37,170 mark as high built on 7th Feb 2019 after budget. During these two months, weak global cues mainly led by US , Europe and China have acted as a dampener for markets worldwide. However, back home, the recently announced budget as well as RBI’s credit policy have supported the Indian market.
The budget presented by the government was like any other Election Budget with the main focus of providing a boost to rural household as well as middle class, with the aim to to increase the disposable incomes in the hands of rural as well as urban households. The recent 25 bps rate cut by RBI in its monetary policy review has also came as surprise policy action for the markets.
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Going ahead, Indian stock market will continue to remain volatile ahead of the upcoming general elections. Further, among global factors US-China trade deal will be an important event to watch out for. Therefore, in such a scenario it is better to sit on cash or invest in defensive spaces like FMCG and Consumer Discretionary. High quality private sector banks focused on corporate lending, and well established capital goods manufacturing companies (in hope of pick up in private capex as capacity utilisation in most of the companies has reached to its optimum level ) with strong order book, are also viable investment opportunities given the current scenario.