Share Market Outlook: The bullish trend in the stock market that has been going on for the last three months is likely to continue in May also. The reason for this is the positive investor sentiment along with the expectation of better economic growth and the possibility of the current government coming back to power in the general elections and strong participation of domestic investors. Analysts have expressed this opinion. In January this year, BSE Sensex based on 30 shares was down 0.67 percent. However, since February, there has been a bullish trend in the market. During this period, BSE benchmark index Sensex rose 1.04 percent. Whereas in March it showed a strong growth of 1.58 percent. The index rose 1.12 percent in April.
Strong participation of DII and retail investors
Master Capital Services Ltd. Arvinder Singh Nanda, senior vice-president, said, “Overall, the bullish trend in the market is expected to continue. A major reason for this is the strong participation of both individual investors along with domestic institutional investors. He said, “If the financial results of the remaining companies remain positive in the coming days, the bullish sentiment in the market is expected to remain.” Nanda said, “If tensions in West Asia ease, companies’ financial results remain good and the Chinese economy shows strength, then market sentiment is likely to remain strong.”
Sensex has gone above 75,000
“The market has reached record highs for various reasons,” he said. Firstly, the positive market sentiment along with the strength of the Indian economy has boosted investor confidence.” BSE Sensex reached its highest level of 75,124.28 points during trading on April 9 this year. The index crossed the historic 75,000-mark for the first time on the same day. The Sensex closed above 75,000 points for the first time on April 10. The market capitalization of BSE listed companies crossed Rs 400 lakh crore for the first time on April 8. Currently, the market capitalization of companies listed on BSE stands at Rs 4,06,55,851.94 crore ($4,900 billion).
Sell in May and walk away strategy not true right now
Sunil Nyati, Managing Director, Swastika Investmart Ltd, said, “Despite concerns over high valuations since the beginning of the year, the rise in mid-cap and small-cap stocks has continued. This is probably due to adequate domestic liquidity and the positive outlook for the Indian economy. This better performance of smaller companies reflects the trend seen in previous major markets globally, he said. This shows that the Indian market is also probably at the same stage of development. Asked whether the sell and walk away strategy will be implemented in May this year, Suman, CIO (Chief Investment Officer) at hedge fund Hedonova “Considering the historical data, it is clear that the traditional ‘sell in May and walk away’ strategy may not hold true given the current market situation and especially the general elections,” Banerjee said.
Market will remain bullish
As per the strategy an investor sells his shares in May and avoids investments during May to October which are generally considered volatile. Then in November the equity returns to the stock market. Nyati said the adage ‘sell in May and stay away from the market’ is now outdated. Statistics do not confirm this. He said, “We believe that the market will remain bullish despite the delay in interest rate cuts and rising bond yields in the US.” Positive results in many sectors coupled with our strong domestic economy are keeping the situation balanced. Apart from this, the possibility of returning the current government back to power in the ongoing elections is also maintaining momentum in the market.
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