India’s stock markets ended the week on a positive note after two weeks of decline on the reports of a possible stimulus to be announced by two major central banks and reversal of the down-trend in crude prices.
India’s benchmark 30 share index BSE Sensex closed the week one percent up after falling by over two per cent on Wednesday and Thursday from the weekly high of 24,479 points reached on Tuesday.
Another important index NSE Nifty also ended the week up by one per cent on Friday.
Nitin Murarka of stock broking firm SMC Global Securities told Rajya Sabha TV: “There were positive signals from the world markets as they became stable and all the commodities have bounced back; secondly there are reports of possible stimulus by ECB and Japan Central Bank that boosted the sentiments; lastly investors, particularly foreign institutional investors, are covering their short positions in the market that led to buying in the market.”
The same positive trend was visible across the global markets on Friday as Asian, European and the US markets closed the last trading session of the week on a high.
Three benchmark indexes of the USA closed the last trading session in a positive note. Standard & Poor’s 500 closed 2% up, Dow closed up by 1.3% and Nasdaq was up by over 2.6% at Friday’s close.
World stock markets and crude started to rise on Friday after the ECB said there were ‘no limits’ to the stimulus measures it might take to boost the Eurozone economy.
The statement immediately boosted the sentiments across the world markets that were reeling under the pressure of a 12 year low crude prices and concerns over the slowing of Chinese economy.
Three benchmark European indexes FTSE, CAX and CAC 40 also closed up between 2-3% on the last trading day of the week.
Business sentiments got another shot in the arm as there were reports that Japan’s central bank was also considering a similar stimulus package.
Important Asian indexes — Nikkei 225, Hang Seng and Shanghai Composite also closed up on the last trading day of the week. Japan’s Nikkei 225 led the rally on Friday as it closed up by over 5% from the previous day’s close.
However, the threat of a downslide still hangs over the world stock markets as fundamentals of the global economic growth are not strong.
Stock market expert Nitin Murarka said: “Currency market is weak. Asian currencies are depreciating and you would not find a strong bounce back in the commodities market as they have just bounced back from a downtrend. There may be a bounce back in the commodity prices, they’ll stabilise and then fall again.”
“Most of the data points coming from China are in negative”, added Murarka as the World Bank this month downgraded its outlook for China’s economic growth for 2016 to 6.7%, the slowest since 1990. “May be the markets will stabilise at this level. But stimulus will have a short term impact on the market.”