Sensex is Up by 382.95….Yes the Stock Market is on their way up.
Despite of the current Covid 19 scenerio in India where the entire nation is struggling and fighting against this pandemic, even corporates are diverting their industrial resources towards the manufacture of oxygen , the rally in the markets has taken many by surprise.
There is a huge gap between the ground reality and the market and the economists have strong feeling that the ground reality will soon catch up.
As per the report Nifty has grown to 5.2% within the past 15 days. The main reason I strongly believe behind this the reduction in the Covid 19 cases. The positivity cases are slowly decreasing which has a great impact in the Indian stock market.
What is the actual reason behind it?
20.57 crore vaccines has been administered , from which more the 30 lakhs vaccines were administered in the past 24 hours. The main reason is the absence of the nationwide lockdown and the limited lockdown as announced by the states have reduced anxiety resulting into optimism surrounding the vaccination programme.
Over the last few weeks, while the US removed restrictions on the export of vaccine raw materials, many countries have come forward to help India by supplying ventilators, oxygen concentrators, cylinders, vaccines, kits etc. which has improved the overall sentiment
Also the banks, which are considered as proxy for the economy , did not face asset quality crisis as had been expected.
The best lead time (Q4 2021 results) has come as the best in the market; also, many feel that the markets are looking at a brighter future in the next two months as they are always trading with a view to the future.
If the absence of national closure and the limited impact of the vacancies announced by the provinces has reduced the concern, there is hope surrounding the immunization program. Also, the banks, which are considered to be the economic representative, did not face the difficulties of the quality of the assets as expected.
The main hope of the market is in the vaccination campaign. “While infection and mortality are low among vaccinated people, the market hopes that in a two-month period when India would vaccinate an estimated 35-40 crore people, it would lead to free movement and close economic recovery. There is a sense in which it hurts for one to two months and the normalization will speed up.