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The Sensex is up 35 per cent since April 2013 and 14 per cent in the ongoing financial year, on hopes of strong measures from the government, despite fears of a bad monsoon and other macroeconomic headwinds. The upside has been led by foreign portfolio flows, in excess of Rs 1.2 lakh crore since April 2013, a third of which have come in the ongoing financial year. The inflows remain robust despite the US Federal Reserve reducing the amount of liquidity it is pumping into global financial markets and cutting its monthly bond-buying programme from $85 billion to $35 billion per month.
The Indian basket of crude oil has gone up eight per cent in 2013-14 in rupee terms due to currency depreciation of 10.3 per cent. Unless geopolitical issues play spoilsport, crude oil is likely to remain around the current level as supply is enough to meet demand. Eventually, global economic recovery will decide the trend. Agri commodities have remained stable in 2013-14 and in 2014-15 so far, they have fallen 6.6 per cent according to the Multi Commodity Exchange spot agri index, though the impact of the monsoon will be watched. Gold prices corrected 19.7 per cent in 2013-14 while silver lost 30.2 per cent globally. Gold in India fell 2.4 per cent due to high physical premiums but silver lost 19.3 per cent due to rupee fall.
