10 Aug 2022
Indian equity markets have seen a fair amount of ups and downs over the last two years, largely on account of the COVID-19 pandemic, the lockdowns that were put in place to restrain it, and its consequent impact on the global economy.
The Nifty 50 sunk to a low of nearly 7500 points* in the March of 2020 post which it started its upward climb to more than 18500 points* in October 2021. This translates into gains of nearly 150%* or the bull phase of the market.
This stellar rally in equities was aided by multiple factors – central banks around the world cutting interest rates to aid economic growth, corporate earnings seeing strong growth, and record inflows from investors.
From October 2021 onwards, equities started seeing a correction, which continued up to June 2022 with the Nifty 50 slipping to below 15200 points* by the end of this period.
As central banks turned their focus to a spike in inflation, and earnings upgrades saw a halt amid the war between Russia and Ukraine, participation of retail investors in the equity markets started thinning, while foreign institutional investors turned sellers.
The Nifty 50 index fell nearly 18%* between October 2021 to June 2022.
July 2022 has been an interesting month, with the Nifty 50 rising nearly 9%*.
It could be a turnaround, said Nilesh Shah, Group President and Managing Director of Kotak Mahindra Asset Management Co.
“Now, central banks may not raise interest rates as much as feared, inflation seems to have peaked out, and FPIs have suddenly discovered India and started buying,” he said, while discussing the outlook for August 2022.
The Nifty 50 was positive as on August 8*, but it will be interesting to see how the rest of the month pans out.
*Source: NSE India
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