Current Scenario of Indian Equity Markets


Being one of the largest and fastest growing economies in the world, the Indian economy is dependent on several factors. India is also one of the preferred destinations for many people to make their investments. Investors across the country are always in constant hope that the economy remains stable. However, there are plenty of factors that lead to hindered growth of the economy.

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The Equity Market in India, also known as the Indian Stock Exchange is the third biggest market, right after China and Hon Kong in the Asian region. It refers to the association or body of individuals that have been established for regulating and controlling of different securities.

This body is strongly dependant on three main factors:

  1. The performance of corporate houses
  2. The funding of equity from all over the world
  3. Monsoons

There are mainly two types of funds that are used in the Indian stock market: private equity funds and venture capital funds. The market also deals with various transactions that are based on two major indices: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Besides this, the market is also affected through trade integration policies. This market is also inclusive of the debt market, which is controlled by primary dealers, wholesale dealers and banks. This month (May, 2014), the equity markets started off on a positive note.

They had recorded their highest ever mark in April, before it lost most of the gains where it closed the month on a flat note. The Sensex was even up by 5.9% on April 20th, 2014 (based on a Calendar YTD-Year-to-date basis). In fact, this drastic improvement in the current account deficit (CAD), stability in the currency and moderating inflation (CPI-Consumer Price Index and WPI-Wholesale Price Index) are some of the factors (positives) that have led to a market rally.

As far as the market outlook is concerned, there is tremendous hope of a strong growth uptrend which could also herald 6-7% GDP (over a span over the next 5-10 years). Investing in different equity funds, is yet one of the most popular ways of investing money. The DSP BlackRock –Top Equity is known to be a very good performer and takes concentrated exposures. This year, India’s second largest private bank-HDFC Bank and the state-owned United Bank of India have already made plans to tap the equity markets so as to raise funds to boost the capital base.  

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