Investors gain Rs 39 trillion in wealth as the Sensex rises over 16% from its June lows

On August 11, domestic stocks reached a four-month high thanks to a drop in US inflation, improved earnings growth in the June FY23 quarter, consistent buying by FIIs, and a drop in the US dollar index. Investors are now richer by over Rs 39 trillion as a result of the markets' steady rebound from their lows in June (lakh crore).

The Nifty50 gained 124 points to settle at 17,659, the highest closing level since April 11, and the BSE Sensex increased by more than 500 points to 59,333. The surge was supported by the larger market as well.

The BSE Smallcap and Midcap indices both increased by 0.8 and 0.5 percent, respectively. The market was boosted by every sector besides metal and telecom. The indices for banks, finance, IT, consumer durables, and real estate all increased by over 1%.

Following the correction in the price of oil, the US inflation rate dropped to 8.5 percent in July 2022 from 9.1 percent in June, which was the highest in more than 40 years. Markets rejoiced as a result of the decreased likelihood of a recession, but the Federal Reserve is anticipated to continue raising rates at its upcoming policy meetings in order to get inflation back to a 2 percent level.

The CPI "decelerated from a gain of 9.1% in June 2022 on an annual basis, displaying better statistics on an annual and monthly basis compared to estimates. Although it is a step in the right direction, the Federal Reserve will continue to aggressively tighten monetary policy in order to control inflation. Additionally, it lessens the likelihood of a future recession, according to Mitul Shah, Head of Research at Reliance Securities.

The US dollar index continued to decline, trading below 105 points, down from 109 points in mid-June 2022. Meanwhile, in India, FII inflow continued as they net bought Rs 9,500 crore worth of shares in August so far, the first positive month compared to the outflow in the previous 10 straight months.

On Friday, August 12, India will announce its July inflation rate, which is predicted to be under 7%. If so, the CPI numbers would have fallen for a third consecutive month on a sequential basis. India's inflation rate peaked in April at 7.8% percent.

According to our most recent tracking estimates, there is more evidence that India's inflation has reached its current peak and will likely slow more quickly than the RBI's projected trajectory, entering the target band by October, according to Rahul Bajoria, MD and Chief India Economist at Barclays India.

As a result of the lagged impact of fuel tax reductions and the fall in some food prices, Barclays India projects a CPI inflation rate of 6.65 percent on-year in July. Core inflation should largely remain stable.

Investor wealth climbed by more than Rs 39 lakh crore from June lows as market mood gradually improved, and the BSE market capitalization increased to Rs 274.13 lakh crore on Thursday from Rs 234.86 lakh crore on June 20.

The BSE market capitalization has climbed by Rs 7.5 lakh crore so far in August.

Strong corporate results and a resurgence in FII buying, according to Mohit Nigam, Head of PMS at Hem Securities, are sustaining the market's upward trend. According to Nigam, investors may gradually add high-quality equities to their portfolios since this surge is expected to continue.

The US inflation statistics may have had an impact on the volatility index's loss of momentum, which benefited the market mood. On Thursday, the India VIX, a gauge of future market volatility, dropped 6.29 percent to 18.36 levels.

Today, 139 equities hit the lower circuit while as many as 287 stocks hit the upper circuit. Aside from that, 35 stocks hit their one-year low levels, while 132 stocks reached a 52-week high (of which 53 are at records highs).

Adani Enterprises, AIA Engineering, Deepak Fertilizers, Devyani International, Hindustan Aeronautics, Home First Finance, JK Paper, SKF India, Timken, eMudhra, Metro Brands, Vadilal Industries, and Mindspace Business Parks REIT were among the stocks whose shares reached a record high.