A Short Report on Indian stock market fluctuations (June -July, 2010)
After the first five months of depression in the Indian stock market, the June month began
with volatility because of global conditions. The Euro zone crisis hit the sentiment of the
investors and the Sensex lost more than 300 points in a single trading day. No doubt the
announcement of $1 trillion as a loan package gave a positive jiffy to the market and the
decision of Chinese Central Bank to appreciate Yuan gave an additional momentum in the
Indian stock market. The optimistic Indian stock market again reacted positive when Asia s
major economy-Japan shown a positive growth rate. After declaration of quarterly results of
various sectors market behave accordingly e.g. the performance of banking sector gave a
positive sign to the market while capital goods industry gave a negative gesture. The
performance of Small Caps (6.13%) is better than Mid Caps (4.48%) and the return of Mid
Caps is same as the return of index. The short position of DIIs reacted negatively in the
month of June and they became net seller of rs. 4777 crore , contrary the optimistic sentiment
or long position of FIIs surged Rs. 7713 crore and they were net buyer .More or less the June
month didn t show a sustainable head and shoulders movement of the index .
The July month began with a very stable positive sentiment .The government decisions on
deregulations of fuel price gave boost to the index, but again the index slept down due to
Bharat Bandh and unexpected rate hike by RBI. The first week of July ended with a negative
flow ,no doubt selling pressure was seen on every sectors specially oil and gas because of
hike on price and banking due to rate hike by RBI. The second week started with a positive
note, FIIs were opted the long position but again due to the global cues (Euro-zone, high
unemployment rate of U.S. , negative sentiment of Asian market) market was down. Again
the market extended the gains every sector except FMCG recorded positive growth. Good
monsoon and also continuous flow of money from DIIs and FIIs extended the growth of the
market in the second week. The third week of July was started with a slight negative
sentiment due to global cues, but the market reacted positive on quarterly result of TCS and
other IT companies. We can see the same patter on next few days (ups and downs).On July
22nd , the sensex closed on 18113 (52 weeks high) same the case with Nifty. No doubt the
July month is going to be more volatile than June, market touched the head position and
within next few days selling pressure will down the boost of index.
Thanks and Regards
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