Indian Stock Market Gains and Upcoming Economic Updates
This week, Indian stock indices saw gains of 0.7-1.0% on a cumulative basis, marking their longest rally in 2024. On Friday, the indices closed largely flat as investors awaited US Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium.
Next week, key updates on GDP from India and the US are expected, along with inflation readings from the US and eurozone. These updates will be crucial as central banks consider rate cuts.
Jerome Powell’s Speech
Jerome Powell indicated that it might be time for the US central bank to reduce interest rates, as inflation rates align with targets. However, he did not specify the extent of the rate cut.
India’s GDP Growth
India’s GDP grew by 8.2% during the financial year 2023-24, maintaining its status as the fastest-growing major economy. The Reserve Bank of India forecasts a GDP growth of 7.2% for 2024-25. The International Monetary Fund also raised India’s growth projections for 2024 to 7%.
Quarterly GDP Forecasts
| Quarter | GDP Growth |
|---|---|
| Q1 | 7.1% |
| Q2 | 7.2% |
| Q3 | 7.3% |
| Q4 | 7.2% |
Vinod Nair, Head of Research at Geojit Financial Services, mentioned that a rate cut of up to 25 basis points in September is anticipated, which could positively impact the market in the short term.
Doubts Revealed
Stock Market -: The stock market is a place where people buy and sell shares of companies. It’s like a big marketplace for company ownership.
Indices -: Indices are like scoreboards that show how well a group of stocks are doing. For example, the Sensex and Nifty are popular indices in India.
US Federal Reserve -: The US Federal Reserve is like the central bank of the United States. It helps control the money supply and interest rates in the country.
Jerome Powell -: Jerome Powell is the person in charge of the US Federal Reserve. He makes important decisions about the economy in the United States.
GDP -: GDP stands for Gross Domestic Product. It measures the total value of all goods and services produced in a country. It’s like a report card for a country’s economy.
Inflation -: Inflation is when prices of things go up over time. It means you need more money to buy the same things you used to buy for less.
Eurozone -: The eurozone is a group of European countries that use the euro as their money. It’s like a club of countries with the same currency.
Interest Rate Cuts -: Interest rate cuts mean lowering the cost of borrowing money. It can help people and businesses spend more, which can boost the economy.
Vinod Nair -: Vinod Nair is a financial expert who gives advice about the stock market and economy. He helps people understand what might happen in the future.
Basis Point -: A basis point is a tiny unit of measure for interest rates. One basis point is equal to 0.01%. It’s used to make small changes in interest rates easier to understand.