The Bullishness of Stock Markets are Driving India’s Economy
Rural India also gets more effective in comparison to COVID first wave.
“The Stock Market Is A Device For Transferring Money From The Impatient To The Patient”-WARREN BUFFET
The second wave of COVID 19 affected the Economic recovery process but one thing is needed to consider “The Bursting Of Stock Markets”. Nowadays Stock Markets are in a bullish mood. India is coming from a deadly second COVID wave that took away the precious lives of many people. The third COVID wave is also predicted by Doctors & Scientists. The main question is Why Markets are so bullish in these Desperate Times? Markets are not considering the emotions of people they follow their own rules. Markets are involved in gaining higher Corporate Profits and forget the short-term pain of the pandemic.
Undoubtedly, the Second COVID wave has affected the Indian Economy but partial lockdowns help in eliminating the concept of Shutdowns and businesses keep operating. Consumers hesitate in spending money on Big purchases like TV, Cars, etc., The MSME sector which is the backbone of small-scale industries is severely affected and small businesses suffered the most. Rural India also gets more effective in comparison to COVID first wave.
Why are Markets Booming?
1. Vaccination Process: Prioritization of the vaccination process, Improvement in the medical infrastructure, Partial lockdowns are the most important issues that prevented the Indian Economy from severe damage. It will also help in reducing the number of deaths, cases in the upcoming third wave. Vaccination will build herd immunity in people.
2. Profit of Bigger Companies: Bigger companies generally mean the listed companies will grab the market share of Smaller Companies (Unlisted companies). The trend continues and the bigger companies will get more & more profits. In 2021-22 Corporate profitability will also increase by huge rates. Bigger companies are dominating the stock market and putting it high.
3. Few Options Available: As we know there are few options available that are better than the stock market. Low returns on Bank Deposits, Gold & real estate push investors into the stock market. They have tasted success in investments since 2020.
4. Foreign Capital: Indian equities are becoming the major target of investors for Foreign Portfolio Investors (FPI)s and they are doing tremendous investments which facilitate the capital inflow. Low-interest rates & a high level of liquidity are the main reasons behind these investments.
5. Policies of RBI: RBI (Reserve Bank Of India) is doing remarkable work in managing India's financial Stability in the time of crisis. Management of prices of rupee in the international market, Providing fiscal Stimulus to Pandemic affected sectors, Taking decisions according to Macroeconomic scenario of the Country.
6. Central Government Measures: The Union budget of 2021 has full provisions of How to accelerate the economic recovery in India. The farsightedness of the central Government is key that the markets are gaining momentum day by day.
7. Giant Manufacturing Sector: PLI (Production Linked incentive) scheme and the revival of the Housing sector provide an edge to India’s Economy. PLI scheme is instrumental in making India “Manufacturing Giant” The focus of the Central Government in modernizing the Indian Manufacturing Industry is commendable.
To Sum Up
Stock markets are leading with the daily surge in their prices and leads to an increase in corporate profits. The policies of the Government and the relief measures provided by the Central Bank are the key for such gains. Foreign investors are also turning optimistic toward Indian markets because India is emerging as a “Vibrant Economy”. Infusion of capital also helps in stock bursting. Now let us see that what will happen to the stock markets in the upcoming days?
Edited By Team CLIQTAX
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