Markets Next Week; Expect A Further Rally In Stocks

Indian markets are expected to gather further momentum in trade next week as global cues remain strong. The Sensex is at near peak-levels and could hit another record high next week.

The momentum was built largely on Friday, when the Sensex gained a staggering 428 points, on strong global cues. In fact, signals of conclusion of phase 1 of tariff negotiations between China and the US prompted the rally. The positive election outcome in the United Kingdom also helped build sentiments. In fact, stocks like Tata Motors, jumped following the election results.

Shares in government owned banks rallied after reports that the money from the Essar Steel resolution could be received this month. Banking stocks like Punjab National Bank and Union Bank of India gained substantially.

Overall, it was an extremely good week for the markets. The metal pack which was also beaten down, gained ground during the course of the week.

New record high possible next week

Global liquidity is immense and this may drive stock prices even further. It would not be a surprise to see the markets scale a new peak in the days to come. For investors who have invested, it would be good to stay invested. However, those looking to deploy large amounts it would be better to stay away from the markets and wait for a decent fall.

The year 2019 has been good for the stock markets and the trend going into 2020 has been bullish.

Poor growth of the economy ignored

The stock markets have ignored the poor growth rate in the Indian economy. This normally happens when there is immense liquidity in the system. Foreign Portfolio Investors have been buying and so have domestic institutions.

It is unlikely that the momentum will change, though the big investors seem to be chasing just a handful of heavyweight stocks, which is driving the index.