ARE WE HEADING TOWARDS ENDING OF BULL PHASE

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 ARE WE HEADING TOWARDS ENDING OF BULL PHASE?




Greetings colleagues,

Unfortunately, the stock market is expected to start the day with a gap down due to several unfavorable events, such as the transfer of funds from India to China due to overpriced Indian market compared to China, new restrictive measures imposed by SEBI for derivative trading,  concerns about Israel-Iran war and fear of tepid earning season.

However, I believe that this negative sentiment is temporary and the bull market is still strong. We can expect a quick recovery soon. I have listed some reasons below to explain why I am optimistic about the Indian stock market.

1) Liquidity:

India is no longer solely dependent on FPI for liquidity. The country now has a large number of retail investors who have great faith in the Indian market and are capable of making significant investments.

2) Fiscal Discipline:

India stands out among other countries for its fiscal prudence. In the latest budget for FY25, the central government has set a fiscal deficit target of 4.9% of GDP, which is one of the best figures globally.

3) Current Account Deficit:

India's current account deficit as a percentage of GDP is currently around 1%, compared to 4.1% in 2008-09. This shows a significant improvement and India now has foreign exchange reserves of $700 billion, up from $300 billion in 2008.

4) Inflation:

The current annual inflation rate in India is at its lowest since August 2019 at 3.6%. This can be attributed to the impressive efforts of RBI in maintaining inflation within tolerable limits without negatively impacting GDP. India currently holds the top spot globally in terms of GDP growth.

5) Infrastructure Spending:

The government has announced several multi-billion dollar infrastructure projects and is committed to completing them during this NDA Alliance coalition government's tenure.

6) Enhanced Banking System:

The Indian banking system has gained recognition as the top-performing system worldwide. Their financial statements are robust and our banking system is well-funded, with disciplined capital adequacy ratios.

7) Favorable Monsoon:

India experienced a substantial amount of rainfall this monsoon season, resulting in a projected record crop yield for the current year. This will lead to positive economic activity in rural areas, increasing demand for MFCG, AUTO, and CONSUMER DURABLES.




Examining robust macroeconomic indicators, currently at their peak, and coupled with positive changes, it is anticipated that microeconomic factors will also thrive. This economic upswing will greatly enhance our financial standing, and this bullish momentum is projected to persist in the foreseeable future. Embrace this optimistic trend and remain resilient in the face of any possible obstacles.

Best of luck!


-Rajendra Jhanwar

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