Sensex and Nifty are two of India’s premier indexes which are largely involved in India’s share market. The share market of any country contributes heavily towards the growth of its economy. The share market is the reflection of the interests and intentions of the investors and this includes foreign investors willing to work with the Indian economy.
Today, Nifty and Sensex saw a record high, closer to the highest ever recorded. Despite the volatile economic conditions, the confident rise in the share market indexes has several reasons.
Let us know about them.
US Federal Reserve’s Dovish Stance
US Fed Chairman Jerome Powell gave a dovish stance which seems to have boosted the market sentiment. Jerome has hinted towards the US central banks’ unwillingness to quickly move towards raising rates.
The rally in the market has been mostly because of the economic liquidity and the liquidity tampering activities will not begin anytime soon, as was anticipated. Considering a move in the same direction, this decision by the US Fed has brought a surge in the Indian stock market.
Rise In Rupee
The rupee, India’s official currency, has seen a rise against the US Dollar in the past few days, which has affected the positive sentiments towards the share market.
The Indian rupee appreciated 31 paise against the dollar on the day of opening trade on August 30, 2021. This rise has fueled positive hopes and aspirations in investors, clubbed with the positive global cues being received by the Indian economy.
Read Also: Is The Share Market Going To Crash?
Macroeconomic Factors
Despite the pandemic, foreign direct investment surged in the country about two fold to reach $17.57 billion during the April-July quarter in the present fiscal year. The reason behind this has been ascertained to be policy reforms and an increase in the ease of doing business.
During the last three months of the 2021-22 fiscal year, FDI equity inflow grew by 168 per cent as compared to the previous year. Besides this, investors are also awaiting key economic data like the Quarter 1 GDP growth rate and manufacturing and services PMI prints to further their investments in the economy. Since there is an expectation of a strong economic rebound, the investors are hopeful.
Positive Economic Indicators
Economic indicators like rising manufacturing activity, higher exports and declining fiscal deficit have remained and are likely to remain positive in the near future. This has strongly contributed towards optimism witnessed by the stock market.
The indicators like the rise in tax collections of GST is signifying higher economic activity, which is further boosting the Indian economy and the confidence of the investors.
Apart from these key factors, there are several long-term and short-term factors that are contributing to the economic growth of the economy. This economic growth is being reflected by the confidence portrayed by the investors in the share market.
Thus, it would be right to say that the economy is going in the right direction, considering the surge in the share market over the weeks.
Image Source: Google Images
Sources: Livemint, Economic Times, Times of India
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This post is tagged under: share, share market, securities, economy, indexes, share market indexes, sensex, nifty, rally, investors, indicators, economic indicators
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