India is country of mysteries, and there are a lot of mysteries we come across time to time. But the in-trend financial or economical mystery every stock market lover talking about is the growing Sensex. From an 18 year old new investor in the market to an experienced professor taking lectures in top IIMs, everyone is trying to crack this mystery. We all are aware with the economic slowdown going on, political issues coming up daily, and other negative vibes the country is facing. Also, the auto sector struggling as there is a high shortage of demand, falling consumption levels, but still Sensex is not letting us believe that the economy is in any trouble. Let’s discuss some of the reasons and facts helping Sensex to survive in such a confused economy.
Well some analysts said that there are some steps government taking on some regular intervals to increase the demand which can be a reason for Sensex to not to fall. The most common answer people come up with is that the corporate tax cut announced by finance ministry, which was the start of this Sensex rally. Talking about some latest news and talks, Finance Minister Nirmala Sitharaman also announced a help of Rs 25,000 crores to the real estate. Basically, there are some the short term positive factors in the market beating long term or large scale factors (like low GDP growth rate), and leading the way to help the Index to survive. Isn’t this interesting. Also there are some stocks which are performing good, or some well grown companies which are not that much affected by the economic slowdown, are helping the Index and investors with some time to time gains.
Also, RBI is trying to create demand continuously by lowering the interest rate, except in their last Monetary Policy Committee meeting, when the decided not to change the interest rates. Economy was surprised by this decision, because the steps by government were not showing that much good results and people were expecting RBI to participate and help economy to revive. The stock market rally was expected to end on this Diwali, but surprisingly we come across a new all time high. The group B shares, which include the mid-cap and small-cap companies faced a downfall of 60%. There are some large-cap companies which are hardly affected by the slowdown. Bajaj Finserv, Nestle India, ICICI Bank are some good examples. Reliance is also an example of a gaining stock giving around 45% return in last one year.
Many investors believe that equity market will give more positive returns, even in the slowdown. Some of the failed government decisions also resulted in increased investments in equity market. Many people believe that the slowdown is at it’s peak now and economy will face a good growth rate further, therefore the returns will be maximized.
Well some analysts said that there are some steps government taking on some regular intervals to increase the demand which can be a reason for Sensex to not to fall. The most common answer people come up with is that the corporate tax cut announced by finance ministry, which was the start of this Sensex rally. Talking about some latest news and talks, Finance Minister Nirmala Sitharaman also announced a help of Rs 25,000 crores to the real estate. Basically, there are some the short term positive factors in the market beating long term or large scale factors (like low GDP growth rate), and leading the way to help the Index to survive. Isn’t this interesting. Also there are some stocks which are performing good, or some well grown companies which are not that much affected by the economic slowdown, are helping the Index and investors with some time to time gains.
Also, RBI is trying to create demand continuously by lowering the interest rate, except in their last Monetary Policy Committee meeting, when the decided not to change the interest rates. Economy was surprised by this decision, because the steps by government were not showing that much good results and people were expecting RBI to participate and help economy to revive. The stock market rally was expected to end on this Diwali, but surprisingly we come across a new all time high. The group B shares, which include the mid-cap and small-cap companies faced a downfall of 60%. There are some large-cap companies which are hardly affected by the slowdown. Bajaj Finserv, Nestle India, ICICI Bank are some good examples. Reliance is also an example of a gaining stock giving around 45% return in last one year.
Many investors believe that equity market will give more positive returns, even in the slowdown. Some of the failed government decisions also resulted in increased investments in equity market. Many people believe that the slowdown is at it’s peak now and economy will face a good growth rate further, therefore the returns will be maximized.
