Equity Market Review

Domestic equity benchmarks, S&P CNX Nifty and BSE Sensex, gained around 5% in November following positive developments in domestic and international markets. On the domestic front, markets cheered up following moody's investors service's decision to retain its stable outlook on India's soverign  rating supported by the high household savings rate and a relatively competitive private sector which will push up economic growth. Sentiments got another booster dose after Goldman sachs upgraded India to 'overweight' from 'market-weight', seeing growth recovery and inflation moderation ahead. The government's strong confidence in getting parlimentary clearence for foreign direct investment in the retail sector supported the markets.

On the international front, the Eurozone finance minister's and the International Monetary fund's consent on a plan aimed at reducing Greece's debt provided relief to the market. Encouraging economic data from the US, China and Germany further improved market sentiments. The market was also supported by continued and strong foreign institutional investor buying. 

Some gains were, however, capped on worries over the looming US fiscal cliff after Moody's downgraded France's government bond rating to Aa1 from Aaa. Back home, sentiments are also dented after GDP growth declined to 5.3% in july-september as compared to 5.5% in the previous quarter. Gains were also limited due to an unexpected Contraction of the Index of Industrial production in September 2012 and record high trade deficit in October 2012.

BSE sectoral indices ended mostly higher for the month except the BSE Oil & Gas Index, which fell 1.23% due to rise in crude oil prices during the month and on worries of subsidy clearence by the government for the oil marketing companies. The BSE Consumer Durables Index gained the most, up 15.76%, as investors preferred to take defensive bets amidst volatility in the market. The BSE Realty Index rose 12.80% due to renewed buying in the sector shares due to stock specific action. The BSE Auto Index ended up at 4.92%.

The markets are expected to be driven by policy announcements by the Indian government and the investors will closely watch as the policy related to reforms. The markets will also be driven by developments in the US and Eurozone.

Disclaimer: The information given above are the result of personal readings of related genuine documents and personal understanding of the subject matter. This  is written to make the readers understand, about recent developments in the equity market . However, this blog is not responsible for any error or inaccuracy in the same.