• The GDP growth rate came down

to 5.01%(June-19) from a high of

9.37%(June-16) but the Sensex has
not seen a slowdown, it has
continuously kept on increasing.
• In a time where GDP growth rate is
at six-year low, private investment
as well as govt expenditure is
shrinking, industrial output sank by
4.3% MoM in sep.
• The avg amount spent by an
individual in a month has
decreased, for the first time in last
40 years, from 1501 INR to 1446 INR.
• Stock markets reflect not what has already happened but what is expected to happen in
coming 3-4 quarters

• Significant gain in markets after the announcement of cut in tax rate on 20th Sep

• The very same day Sensex gained 1921 points closing at 38000 and Nifty gained 570
points closing at 11300

• There is lot of hope that govt will announce more sector specific measures to easy
corporate stress
• Globally there is optimism that the first phase of US-China trade pact will roll back certain
tariffs.

• This has driven capital inflow in the emerging market equities.

• Foreign Portfolio Investors have been net buyers of Indian Equity since Sep’19.

• In oct the net inflow was 3800 CRs while in Nov first week they infused 6434 CRs in equities
in a boost to market sentiments.
• The govt has already announced a 25,000 CR alternative investment fund for the real
estate sector to bail out the stalled projects.

• In Aug it brought out a package to aid the auto sector by pushing govt departments to
purchase new vehicles and increasing the rate of depreciation to write off the vehicles
faster.

• For banking sector govt announced infusion of 70,000 CR and housing finance
companies were given additional 30,000 Cr
• The benchmark indices represent Sensex, strongest 30, and Nifty, strongest 50 firms
fortunes
• These are the companies that are safe haven for investors in an economic downturn
• The combined Market-cap of mid-cap and small-cap stocks is valued at 7.64 Lakh Cr,
which is lowest in last one decade indicating that only large-cap stocks have benefited
from the current rally.
• Only 9 of the 30 Sensex companies have contributed 93% of the incremental market cap
gains in the current rally
Company Gain(%) (20th Sep to 14th Nov)
RIL 30.3
ICICI BANK 12.1
TCS 11.1
HDFC 9.3
BAJAJ FINANCE 8.8
HDFC 6.9
AXIS BANK 5.4
HUL 4.9