market overview

Key benchmark indices rallied in the week ended Fridaywhile the rupee strengthened to an 11-month peak against the dollar as the Bharatiya Janata Party (BJP) led by Narendra Modi will be able to form the next government at the centre and that Narendra Modi will become the next Prime Minister of India. All sectors, except three ended in the green with the BSE Bankex rising 4.39% and the BSE Realty index gaining 5.97%. The consumer goods index fell 1.85% and the IT index slipped 2.22% while the healthcare index fell 1.39%. The rupee strengthened to as much as 58.62 per dollar, its highest since late June 2013, marking a 17.5 percent gain since the record low hit in August. The benchmark 10-year bond yield fell as much as 10 basis points to 8.68 percent, its lowest since Feb. 6.
With Lok Sahba election results out, investors' focus will shift to the likely allocation of key ministerial portfolios in the National Democratic Alliance (NDA) government and the first budget of the new government expected by July 2014. Trend in investment by foreign institutional investors (FIIs), trend in global markets, trend in other global emerging markets, the movement of rupee against the dollar and crude oil price movement hold key for the near term trend on the bourses. Other critical areas for investors include the new government's relationship with a central bank focused on inflation and the need to deliver a budget that can reassure markets and credit agencies about the fiscal deficit.