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					               Positive sentiments push stock markets
The markets across the world continued their uptrend over the last week. The domestic
markets also saw a good rally towards the beginning of the week and touched higher
levels.
The Sensex touched the 16,000 mark and the Nifty touched the 4,700 mark. However,
some profit booking was seen towards the middle of the week, mainly on account of a
technical correction and weaker monsoon forecast by the Meteorological Department.
The sentiments are quite positive in the markets as many global rating agencies have
upgraded their forecasts for the domestic stock markets after the first quarter results
season. They believe the current bullish trends in the markets have the potential to take
them to significantly higher levels in the short to medium terms, perhaps in the next
couple of months.
The sentiments have also improved in the global markets after the quarterly results
season which is reflected in the strong prices of commodities like crude oil and gold.
The inflation rate continued to remain in the negative territory for the eighth consecutive
week, and reported at minus 1.58 percent for the week ended July 25.
Here are some of the significant events that influenced stock market movements last
week:

Global developments

Stock markets round the globe remained quite firm during the last week. The positive
sentiments helped the key US markets cross significant levels.
The S&P 500 crossed the 1,000 mark and Nasdaq crossed the 2,000 mark. Analysts
believe there are definite signs of improvement in the manufacturing and banking sectors.
These sectors were the worst hit during the recession.
However, on the other hand, concerns are rising on the fast-moving commodity prices,
and a much higher inflation rate around the world due to that. Some analysts are
concerned that higher inflation and interest rates could impact the economic recovery.

Dollar depreciation

The rise in the investor sentiments in the markets has resulted in lower demand for other
safer investment instruments. The dollar remained weak and hit the lowest level of the
year against a basket of six major global currencies.
Analysts believe the main reasons for the fall in the dollar include rising stock prices in
European markets , better manufacturing data from Chinese and European markets, and
higher crude oil prices.

Higher crude oil price

The prices of global energy commodities like crude oil and natural gas surged last week
mainly due to an anticipation that demand will rise as economic conditions are getting
better. The weakness in the dollar also added to the prices of these energy commodities.
Analysts believe the price of crude oil will rise even further from the current level of
USD 70 per barrel to around USD 85 to 90 per barrel in the short to medium terms. This
is mainly due to rising demand and speculative activity.

Weak monsoon

According to the Meteorological Department, the rainfall in the last few weeks remained
below expectations. It has revised downwards the overall monsoon forecast for this year.
The stock markets corrected on the back of this announcement as investors are worried
about higher prices of basic commodities and food articles due to a lower agricultural
yield this year. The prices of basic commodities and food articles are already very high.
Analysts believe the prices of some articles like sugar, wheat, pulses and vegetables have
the potential to rise quite significantly from the current levels, mainly due to a lower
supply and speculative activity in the market.




                                                                           Submitted by:-

                                                                       PRIYA LUTHRA
                                                                       PGDM 2ND YEAR
                                                                           SECTION C
                                                                              FI-0831

				
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