How did Indian and global markets behave in May-21?

Last updated: 08 Jun, 2021 | 02:30 am

How did Indian and global markets behave in May-21?

The Indian equity market was one of the best performers in the previous month of May, with the Nifty 50 clocking gains of 6.5%. China was the next best in terms of returns, with Shanghai Composite clocking gains of 4.9% in the month.

Factors behind the performance of global markets:

  • In the USA, key equity indices ended higher in May 2021, on the back of optimism around faster recovery and more stimulus. Dow Jones ended 1.9% higher, while S&P 500 registered a notable growth of 0.6%. Tech-heavy NASDAQ gave negative 1.5% return.
  • The gains in the European markets were supported by upbeat corporate earnings and buoyant corporate guidance for 2021, apart from vaccination drive.
  • Japan stock market (Nikkei 225) returned just 0.2% in the month, as investors turned cautious due to a recent spike in COVID-19 cases, leading to lockdowns in key regions.
  • Shanghai Composite, China’s stock market index, was the one of the best performers in the month, buoyed by better-than-expected macroeconomic data (jump in China’s exports, service sector growth, upbeat FDI).
  • On the negative front, localized lockdowns, inflation concerns, expectations of tightening monetary policy limited gains in the stock market globally.

Factors behind the rally in the Indian markets

Despite corrections on certain days in the month, the Nifty closed with gains of 6.5%. Nifty PSU Bank Index, and Nifty Energy outperformed. MidCap and SmallCap indices also had a good month in terms of gains in the month

Positive Market moving News during the month were

  • Upbeat Q4 earnings from in financials, energy and metals
  • Fall in Covid-19 cases towards the end of the month (from above 4 lakh to around 1.3 lakh per day)
  • Macro-data indicates recovery: record GST (in April), Auto sales

Negative Market moving News during the month were

  • Concerns due to fresh lockdowns due to second wave
  • Downward revisions in GDP estimates
  • Caution from RBI regarding stock market valuations

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