Financial year 2009-10 ended with continuous sell off in Indian stock market. On the very first day of this financial year (FY 2010-11) the trend just reversed and markets regained it’s strength. Now the short wait for growth& profit figures started and every fingers are crossed! March 2010 was the best month in FY2010 in terms of figures for Indian capital market. Another specialty is that equities once again showed it’s potential in this financial year. When the financial year started in March 2009 sensex was at 8763. The closing figure for sensex for the financial year is 17528, ie, an awesome growth rate of 100 percent! The figure just doubled when reached towards the end of the fiscal.
According to our Prime Minister India would grow at a rate of 7.2% in Fy2010. From there on the growth rate will be steady and he believes that a double digit growth rate is attainable. PM also pointed out that for the Twelveth Plan period main agenda should be to eliminate poverty and create jobs. The script for India’s growth story is ready and now is the time for work.
Inflationary worries and banking rate hike were the major concerns during March 2010. In February Indian inflation is at 9.9 percent. In order to curd inflation RBI hiked repo and reverse repo rates by 25 basis points. More strict measures are expecting in it’s annual monetary policy announcement on April 20, 2010. Corporate results are on the pipe line. There will be mixed reaction in the market after these key announcements. Indian currency appreciated steadily in March against US dollar. Foreign institutions continued buying Indian stocks, in March they bought equities worth Rs.9510 crore. Except one or two days domestic mutual fund companies continued selling for the third consecutive month, DIIs sold Indian equities worth Rs.3861 crore.
Sensex recorded a growth rate of 6.68 percent in March against it’s February closing to close at 17528. In March alone sensex added 1098 points. Nifty also recoded a hike of 6.64 percent and the closing rate for the month is 5249. It also breached it’s psychological level of 5300 and touched a height of 5330. Midcap and smallcap indices also presented decent figures and both are up by 6.38&5.33 percent respectively.
All sectoral indices barring PSU gained investor confidence. Sell off continued in PSU stocks and the index is down by 2 percent. Metal stocks were the top gainers with 9.58 percent increase in it’s March figure against last month closing figure. Health care and banking stocks were up by above 8 percent. Investors now believe that buying interest would spread to Midcap and Smallcap stocks.
According to Valueresearch data the assets under management (AUM) of the mutual fund industry dipped in March. The industry’s total AUM stood at Rs 7,43,783.24 crore, a fall of 4.28 percent against it’s February last figure.
Looking forward Indian stock market outlook is pleasant. Now it’s time for figures to determine the direction of Indian market. Now is the time for close watch and right catch.