The strength of the Indian economy, which has emerged as the fastest growing in the world, is being amply reflected in the stock markets with the BSE clocking a 300 per cent growth in market cap to a phenomenal Rs 400 lakh crore and the Sensex soaring from 25,000 points to 75,000 points in the last 10 years of the Narendra Modi government.

According to SEBI chairperson Madhabi Puri Buch, the record valuation of Indian stocks is "an emphatic vote of confidence by foreign portfolio investors (FPI) in India's growth prospects."

India is expected to get a normal monsoon in 2024, private weather forecasting agency Skymet said on Tuesday, which is good news for the country’s agricultural sector that was hit by an erratic monsoon last year. Monsoon rains are expected to be 102 per cent of the long-period average of 868.6 mm for the four-month period from June to Sept, according to Skymet.

An important feature of the recent rally in India is that it is led by fundamentally strong sectors like capital goods, automobiles, banking and metals, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. The robustness of the Indian economy, the sustained capital flows into mutual funds and the enthusiasm of domestic investors can support the rally. However, valuations of the Smallcap segment are elevated and unjustified, he said. The hallmark of a bull market is its ability to set new record highs. This has been happening in the US market and also in the Indian market, he said.

Small and Midcap (SMID) stocks have rallied to levels where as a per cent of India's nominal quarterly GDP, they have hit a record. This level, at 52 per cent currently, is now higher than that seen in the roaring bull market of 2003-07, DSP Mutual Fund said. At 52 per cent, the SMID market cap to GDP (nominal quarterly) is at its highest level ever. The long-term average of this ratio is just 29 per cent.

India's consumption of petroleum products such as diesel, petrol, LPG and bitumen went up by 5 per cent to touch a record level of 233.276 million tons during the financial year that ended on March 31, 2024, according to data compiled by the Ministry of Petroleum and Natural Gas. The consumption of petroleum goods in 2022-2023 stood at 223.021 million tons.

BSE Sensex is trading at 74,604 points, up 356 points. Auto stocks are leading the Sensex gains. M&M is up more than 3 per cent, Maruti is up more than 2 per cent. For IT companies, Q4 results will be tepid and, therefore, the market response will depend on the management commentary, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. Results of financials will be good and this can push Bank Nifty higher led by banking majors like HDFC Bank, and ICICI Bank, he said.

Gold rose on the Multi Commodity Exchange (MCX) on Monday as prices of the precious metal shot up to a record high in the international market amid rising geopolitical tensions in Central Asia. Gold futures, maturing on June 5, 2024, stood at Rs 70,981 per 10 grams on the MCX, after recording an increase of Rs 345 or 0.49 per cent over the previous close of Rs 70,636.

An important trend in FPI activity is the big selling in the FMCG segment and big buying in telecom and realty, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. There have been big swings in US bond yields this year in response to expectations regarding rate cuts by the Fed. The year started with the market discounting six rate cuts in 2024 and consequently, the yields drifted down. Then the market started factoring in only three rate cuts since the US labour market continued to be tight, he said.

In FY24, the realty sector sectoral index soared with a remarkable 132.5 per cent return, securing its position as the top-performing sector of the year, according to Motilal Oswal Asset Management Company. The auto sector continued its upward trajectory and surged by 4.9 per cent in March, leading as the top performer, while the IT index saw a 7.5 per cent decline, marking it as the worst performer.

The realty players have said that the RBI’s move to maintain the current policy rate will stimulate growth within the housing market predicting a significant boon for prospective home buyers.

Incidentally, the RBI's Friday decision came days ahead of the auspicious Gudi Padwa (launch of the Hindu calendar year) as the realty players hope to witness higher property transactions.