4 reasons behind the recent bull rally

D-Street hit record high yet again with the Sensex breaching past the 52,500 mark. Benchmark indices too followed suite with Nifty Midcap and Small Cap also scaling all time highs.

India has had a stellar bull run and has been the best performing Asian market. Another milestone to this is the $3 trillion m-cap This despite India’s economic indicators going for a toss.

Let’s look at some of the key reasons behind this northward movement:

Positives from COVID trajectory 

India’s COVID graph has been falling slowly but steadily. From the record breaking 4.14 lakh cases in May, it has significantly dropped to less than 1 lakh mark in the past few days. Additionally, active cases have also been declining.

Cascading effect of unlocking by states 

States have gradually started unlocking as cases see a sharp decline. More such easing is expected which is driving stocks from sectors like hospitality, aviation, etc.

Demat accounts grow signalling investor rise 

Lockdown induced surge in retail investors has introduced fresh captial into the share market. Bombay Stock Exchange this month witnessed registered users crossing the 7 crore mark.

Vaccination coverage 

Prime Minister Narendra Modi recently reversed an earlier decision which gave power to states for procuring vaccines, and slashing of rates. More EUAs have been given to global manufacturers and vaccine production is already being ramped up.