Stock Market Faces Volatility as Economic Survey Predicts Slow Growth
The stock market experienced high volatility during Monday’s trading session as the Economic Survey presented a conservative growth forecast for the Financial Year 2024-25. Both major indices faced selling pressure and closed with marginal dips.
Market Performance
The NSE Nifty 50 index declined by 21.65 points to 24,509 points, while the BSE Sensex fell by 102 points to 80,502 points by the end of the session. Sector-wise, Nifty Realty, Nifty Consumer Durables, and Nifty Private Bank recorded losses, whereas Nifty PSU Bank and Nifty Pharma led gains.
Expert Opinion
Vinod Nair, Head of Research at Geojit Financial Services, stated, “The conservative economic growth forecast for FY25, presented in the economic survey, has introduced some spikes in volatility ahead of the budget. Further, the below-estimated Q1 results from certain index heavyweights like RIL added to apprehensions of a slowdown in earnings growth in FY25. Although the budget is anticipated to be favourable, investors will closely monitor whether it continues to tickle traction, given high valuations and the risk of a downgrade in earnings.”
Company Performance
Shares of Reliance Industries declined by more than 3.4% to Rs 3004 following the company’s financial results announced on Friday. Top gainers on the Nifty 50 included NTPC, Grasim Industries, UltraTech Cements, HDFC Bank, and Power Grid Corporation. Major losers included Wipro, Kotak Mahindra Bank, Reliance Industries, SBI Life Insurance, and ITC.
Geopolitical and Economic Factors
Investors also focused on significant geopolitical developments, such as US President Joe Biden’s decision to withdraw from the presidential race and endorse Vice President Kamala Harris, influencing market sentiment. Key economic data from the US, including the Personal Consumption Expenditures (PCE) inflation index and the Q2 GDP estimate, are set to be released this week, offering insights ahead of the Fed’s July meeting.
Upcoming Events
Finance Minister Nirmala Sitharaman is expected to present the Union Budget in Parliament on Tuesday, which will be closely watched by investors.
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.
Volatility -: Volatility means that the prices of stocks are changing a lot in a short period. It’s like a roller coaster ride for stock prices.
Economic Survey -: The Economic Survey is a report by the government that reviews the country’s economy and predicts future trends. It’s like a report card for the economy.
FY 2024-25 -: FY stands for Fiscal Year, which is a one-year period used for accounting and budget purposes. FY 2024-25 means the financial year from April 2024 to March 2025.
NSE Nifty 50 -: NSE Nifty 50 is an index of the National Stock Exchange (NSE) that includes 50 major companies in India. It’s like a list of top companies to watch.
BSE Sensex -: BSE Sensex is an index of the Bombay Stock Exchange (BSE) that includes 30 major companies in India. It’s another list of important companies.
Nifty Realty -: Nifty Realty is an index that tracks the performance of real estate companies in the stock market.
Nifty Consumer Durables -: Nifty Consumer Durables is an index that tracks companies that make long-lasting goods like refrigerators and washing machines.
Nifty PSU Bank -: Nifty PSU Bank is an index that tracks public sector banks, which are banks owned by the government.
Nifty Pharma -: Nifty Pharma is an index that tracks pharmaceutical companies, which make medicines and healthcare products.
Reliance Industries -: Reliance Industries is one of the biggest companies in India, involved in businesses like energy, petrochemicals, textiles, and telecommunications.
Geopolitical events -: Geopolitical events are important happenings in different countries that can affect the world, like wars or trade agreements.
Union Budget -: The Union Budget is a financial plan presented by the Finance Minister that outlines the government’s revenue and spending for the coming year.
Nirmala Sitharaman -: Nirmala Sitharaman is the Finance Minister of India, responsible for managing the country’s finances and presenting the Union Budget.