Stock Market: US debt ceiling suspense brings swings; broader action remains robust
By S Jha
New Delhi, May 17: The US debt ceiling negotiation has been historically protracted, which on occasions have induced wild swings in the equity markets globally. With the US House Speaker Kevin McCarthy affirming that Washington will not default on its debt, the traders went on a high to push Dow Jones higher in the afternoon.
The Indian equity markets too recouped some of the losses in the fag end of the trading session. While the Indian equity markets had largely been unaffected to the US debt ceiling negotiations, the local factors had brought down the indices on Tuesday and the sentiment continued further. The HDFC twins going ex-dividend, as well as some delivery-based selling as part of the profit booking events took the indices lower. On the way Nifty broke down from its key support levels to dive down deeper.
The IT index further melted on Wednesday to put massive pressure on the indices, as the heavyweights against were sold in the cash markets. The IT index has been one of the most laggard sector for the past six and more months, with secular losses all across the constituents, barring a few exceptions.
The likelihood of the late arrival of Monsoon, which is now expected to touch the Kerala coast in the first week of June, is also keeping the investors on the edge. The silver lining is the expectation of the UN that India may touch a GDP growth in the current fiscal of 6.7 per cent is another positive, which is marginally above the estimate of the Reserve Bank of India also.
But the equity market is growing full of tales of multibaggers, which are giving dizzying returns to entice the investors to put their money in the stock market amid the lack of higher returns in the traditional instruments of savings. Kaynes Technology, a recent IPO which had not gained great ratings from the brokerages, has shown stellar run on the bourses since listing. The scrip has now zoomed to Rs 1149, while it had listed at about Rs 689 a few months ago. It has just posted an impressive quarterly result.
KPI Green Energy continues to dazzle the investors with gains on the bourses, as it has now touched the level of Rs 550. It may be recalled that a few months ago this scrip had given bonus in 1:1 ratio, and if it had not been price adjusted the share would have now been commanding a price of Rs 1100. This is a remarkable journey for the scrip to have come out of the SME board, and it just took off from the level of Rs 140 to rise further.
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