Euphoric Narendra Modi hope rally to continue in markets next week

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Euphoric Narendra Modi hope rally to continue in markets next week
There is no stopping the hope rally in the Indian stock markets as frenzied buying by Foreign Institutional Investors (FIIs) continues unabated on hopes of a Modi led government at the centre.

For 5 consecutive days the Nifty hit fresh lifetime highs on sustained buying by foreign funds.

On Thursday FIIs net bought in the Indian markets in excess of Rs 2000 crores, while on Friday they net bought to the tune of Rs 1362 crores. During the week that have net bought more than Rs 7,500 crore worth of shares and more than Rs 20,500 crore of equity in current month.

The Sensex and the Nifty hit several lifetime highs with each day of the week seeing the Nifty scale new peaks.

Interestingly, the new highs being conquered by the benchmark indices is largely on account of the sharp rally in banking and metal stocks.

In fact, there is frenzied buying in PSU banking stocks which have seen substantially rally this week. On Friday stocks like Oriental Bank and Union Bank rallied by 7 per cent each. The weekly gains in some of these stocks has now reached almost 20 per cent in some cases.

Dealers say there was some buying interest happening ahead of the RBI's credit policy on hopes that the RBI would keep policy rates steady.

Another place where investors are parking their money is in the metals space. Hindalco and Tata Steel saw a spectacular rally this week. Other stocks that may continue to hog the limelight in the next few weeks would be the infra and capital goods space. Capital goods stock like Bhel have already rallied significantly.

The sad story in the markets is that software stocks continue to drift lower with the likes of TCS, Infosys falling during the week. As the rupee appreciates against the dollar do not expect these stocks to recover anytime soon as profitability is likely to be hit by gains in the rupee.

Clearly, there is a churn that is happening from IT and Pharma to banking and infra stocks. And, that trend is likely to continue.

The next week is likely to see the RBI credit policy and hopes are that the central bank would keep interest rates steady. Banks may see some action ahead of the credit policy.

Read more about: rbi, nifty
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