Know the   reasons behind the ‘ bull run’ of the Indian share market amid the second wave of covid-19 pandemic

Mumbai: India is in a fight against the coronavirus pandemic. The economic growth of the country has been derailed by the second wave of the pandemic.  The economic activities have been hit by the pandemic in several states in the country.  But amid all these, the Indian share market is continuing its ‘bull run’.

The domestic benchmark indices had touched an all-time high on Monday. BSE Sensex and NSE Nifty is registering gain despite the declining economic activity in the country.  As per market experts, there are many reasons for this upward rally of the share market.

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Nilesh Shah, the Managing Director of Kotak Mahindra Asset management has pointed 7 reasons for the upward rally of the Indian share market. As per Shah, the markets are discounting the short-term pains of Covid for the long-term gain of higher corporate profits.

Shah claims that the economic activities will become normal by the second quarter of 2021-22. The accelerated vaccination campaign the expansion of healthcare facilities will support this. So, the third wave of the pandemic will be less damaging.  Also at present, the investor has only a few reliable investment options.  As other investment options like bank deposits, gold and real estate investment are giving only lower returns. So this will lead to a higher fund inflow to the share market.

The current trend of bullish run by the market will lead to the growth of bigger companies. The bigger companies will grab the market share from smaller companies and this will lead to higher profits. The foreign portfolio investors are investing more in the Indian market. They had become aggressive buyers of Indian shares. This will lead to better results for the Indian economy in the future.

Shah also points out that the policies launched by the apex bank in India, the Reserve Bank of India, will support the economic growth of the country and also higher profits for corporates. The expectation of a better GDP growth rate has also supported the market. The revival of the housing sector and production-linked incentives will take the GDP growth rate beyond single digits in 2022-23. The PLI scheme can act as a catalyst for India’s emergence as a manufacturer to the world.

As per Shah, these are the reasons for the upward rally of the Indian share market.