Markets rally in July

The benchmark Sensex posted its biggest monthly advance since May, buoyed by foreign institutional investors (FIIs) buying. The Sensex gained 3.9 per cent, while the mid-cap index rallied 8.1 per cent, the most since March. FIIs pumped $1.4 billion in July, taking their year-to-date investment tally to $4.3 billion. Low yields in developed world bonds, coupled with measures taken by central banks to support global growth, has created favourable liquidity conditions for equities, particularly in emerging markets (EMs). Interestingly, the gains in the market come exactly a month after of Brexit. Most global markets had dropped sharply on June 25, after the UK voted to leave the European Union, but managed to quickly get back on their feet. Commodity-related stocks were among the best performers in July.