S&P 500 Touched Record Level and India’s Insurance Sector in Focus

In the last week, the global stock market showed a strong performance with the S&P 500 touching record level highs. In the Indian market, the insurance sector faced some major changes which kept their stocks in the rally. In this blog, we’ll know in detail what happened last week (November 25, 2024 to November 29, 2024) all across the globe.

US Stock Market Surge

In the past week, global stock markets posted a strong performance, fueled by optimism about monetary policy adjustments and economic developments. The U.S. led the charge, with the S&P 500 approaching record highs and the Nasdaq Composite gaining momentum. This positive trend was supported by robust corporate earnings and the seasonal “Santa Rally.”

Meanwhile, the Federal Reserve’s Core PCE Price Index, a key inflation gauge, rose 2.8% year-on-year in October, moderating expectations for immediate policy easing. U.S. GDP growth for Q3 matched forecasts at 2.8%, down from 3% in the previous quarter. Durable goods orders exceeded expectations, although core durable goods data fell short.

Inflation Worry in Global Markets

In Europe, the FTSE 100 recorded its best week since May, recovering from earlier declines. However, concerns about rising inflation and slowing economic growth in the eurozone lingered. German inflation held steady at 2.4% in November, with core inflation ticking up slightly to 3%.

The European Central Bank is expected to implement rate cuts to address these challenges. Japan’s stock markets maintained their upward trajectory, driven by structural reforms, wage increases, and investor optimism. Strong inflation in Tokyo has heightened expectations of a potential Bank of Japan rate hike. Meanwhile, in China, large-scale stimulus efforts have lifted stock markets but have yet to reinvigorate the broader economy. Investors are also bracing for potential economic shifts under Donald Trump’s presidency, further adding to market uncertainty.

India’s Insurance Sector Changes

Back home, domestic markets have been experiencing heightened volatility, primarily driven by global uncertainties and domestic developments. Amid these fluctuations, the insurance sector has been a key focus area. Shares of insurance companies extended their rally following the Ministry of Finance’s proposal to raise the foreign direct investment (FDI) limit in domestic insurance companies from 74% to 100%. Additionally, the Ministry proposed reducing the minimum net-owned funds requirement for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, aiming to attract more international players into the market.

The Insurance Regulatory and Development Authority of India (IRDAI) has also been empowered to implement lower capital requirements of at least ₹50 crore for companies catering to underserved regions on a case-by-case basis, a move expected to boost financial inclusion.

Conclusion

Investors remain cautious, anticipating significant economic data releases, including India’s Q2 GDP figures, China’s manufacturing PMI, and the Eurozone’s inflation numbers. Geopolitical concerns continue to weigh on sentiment, but market optimism may resurface if tensions ease. However, a period of consolidation within a broader trading range seems likely in the short term.

Looking ahead, market participants are closely watching the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting scheduled for December 6. The key question is whether the central bank will maintain the current repo rate of 6.5%, which has remained unchanged for ten consecutive reviews, or opt for a rate cut.

So, open Demat account with SMC Global Securities and invest as per your investment objective and risk profile.

Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.