Stellar Performance Indeed

Companies posted stellar growth in revenue and profit in the June quarter at the aggregate level, springing back from the low base of the year-ago quarter, which was marred by a strict lockdown amid the first wave of the pandemic. However, profitability was under pressure due to rising input costs. Indian stock markets have been riding on a wave of optimism since March 2020, following the devastating impact of the COVID-19 pandemic.

Benchmark indices Sensex and Nifty have more than doubled after crashing in March 2020. Experts expect the current market momentum to continue as investor sentiment remains strong due to the low-interest rate regime and high liquidity. Factors like real economic growth, weakness in consumer sentiment, demand and inflation do not have a continuous impact on the stock market and only lead to a momentary loss of momentum. Simply put, the momentum depends mostly on how companies perform, major economic and political developments, liquidity and investor sentiment.

A rush of IPOs, the low-interest rate regime and ample liquidity are major factors that have helped domestic markets achieve the feat. As of today, Sensex remains strong at 53,000 and Nifty remains just 20 odd points below its all-time high of 15,916.

Experts are confident that both market benchmarks will hit fresh records as optimism remains high, primarily due to strong quarterly performance delivered by top companies. A sudden rush in IPOs is also helping markets gallop towards fresh record highs. Let's hope the stellar performance helps more businesses find their way to the top of the curve.