Indian stock indices stretch gains on firm overseas cues
Globally markets are bullish even when global growth is sluggish. The reason for this bullish trend is that the US recession, which markets had discounted last year
NEW DELHI: Indian stock indices traded positively on Wednesday morning, tracking firm cues from overseas peers and indications that the US may avoid a recession. Sensex and Nifty were 0.2-0.3 per cent higher at the time of writing this report. "In tune with the International Yoga Day, the market is slowly stretching both ways, without any sharp up or down moves. However, the broad market trend is up," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Globally markets are bullish even when global growth is sluggish. The reason for this bullish trend is that the US recession, which markets had discounted last year, didn't happen and there are indications that the US might avoid a recession. So, markets are correcting the wrong discounting of last year," Vijayakumar added.
Strong fundamentals including a firm GDP outlook, moderate inflation and strong purchases by foreign investors are positive for the markets. The domestic stock indices are near their all-time highs. However, the slow progress of the southwest monsoon by far remains a concern for financial markets.
Meanwhile, Prime Minister Narendra Modi's US visit and possible defence collaboration between the two countries have brought back focus to defence stocks in India. Defence stocks have performed quite strong, in fact, many turned multi-bagger, over the past few years due to the government's aggressive indigenous manufacturing push.