Why Indian Market Is Becoming Bullish?

According to the data from NSE, foreign investors have poured over Rs 1.01 lakh crore into the Indian equity markets since the beginning of November.

Foreign investors are driving the Indian equity markets to new heights

A combination of low interest rates in the US and the weak dollar has led to inflows into emerging markets like India.

Low-interest rates mean the returns on US Treasurys are subdued and hence foreign investors prefer Indian markets, where the return could be relatively higher. Driven by the inflow from foreign players, the Indian equity markets have continued to hit new heights.

What else is contributing to the bullish market in India？

Besides the foreign investor inflows, the rally is also attributed to the good corporate earnings season and trends from the festive season.

Even the big global firms like Morgan Stanley and Goldman Sachs have turned bullish on India, citing factors such as accommodative monetary policy, government spending, and peaking out of Covid-19 infections.

Pay attention to potential risks

But there are also a lot of factors that could prick the pricey bubble of Indian markets. Inflation is still a bone of contention and could hurt the Indian central banks attempts to keep the rates low. At the same time, the recovery in demand has been slow with the imports and credit growth showing signs of weakness.

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