Indian Stock Market's view and What's Next?
After COVID, Indian stock markets are the most talked-about topic these days, with consistent growth.
The Indian stock markets have piqued the interest and enthusiasm of all investors and traders. The index has reached new highs of 17940, while the Bank Nifty has reached new highs of 38395.
The question now is whether the market will fall or not?
The Indian economy has shown a good recovery in the past after COVID spreads around the world, and new investments are encouraging signs. Due to a low base effect, GDP reached a new high, and domestic demand increased as private consumption and fixed investment grew, while imports grew faster than exports. The pandemic's uncertainties have subsided a little, and the economy is gaining traction.
We have seen that Indian stock indices have recently topped the charts, and many investors/traders believe that they will fall in the near future. Regardless of the current state of the markets, there are numerous external and internal factors that influence them. After making a low of 7526 on March 24, 2020, the Nifty 50 has been on a tremendous bullish trend. By November 2020, the Nifty had recovered beyond expectations and had resumed its bullish trend. It continued the bullish trend in Indian stock markets after each dip.
India has risen to sixth place among the world's largest markets, with the best returns since March 23, 2020. The Nifty has returned 27.69 percent year to date, while the Sensex has returned 25.75 percent, making India the best country in the world for wealth creation. The immediate recovery following the second wave of COVID, $40 billion in foreign institutional inflow (in the last 18 months), accelerated vaccinations, and stronger companies following corporate deleveraging are some of the major reasons for the bullish market that is outperforming the rest of the world.
The question is once again when the market will fall and if we will see the bearish trend, as it has been bullish for the longest time.
The Nifty has been moving in a steep direction for the past three months, which could weaken or reverse the bullish trend. There's a good chance we'll see a pullback or pause now. Traders and investors should be prepared for it, and while it is difficult to say that the Indian market is in a bearish trend, a correction and pullback to its next support levels may be seen in the long run.
Thanks for Reading!
Shubham Agarwal (CFA L2 Candidate | MBA candidate at University of Cambridge, UK)
Want to discuss this further or have questions regarding finance/strategy? Feel free to connect here - https://www.linkedin.com/in/shubhamagarwal13/
