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| WHY MARKET AT ALL TIME HIGH? |
Why so much momentum in the market?
Friends, exactly one year ago today the market was in LOWER CIRCUIT due to COVID-19. The markets were at their lowest levels, but what happened within 1 year that the markets are at ALL TIME HIGH today? Due to the lockdown, all the industries were closed, all the shops were closed, economic activities were completely at a standstill, and there was an outcry in the whole world due to COVID-19, still, why is there so much momentum in the market?
There is only one reason for this rise and that is hope. The market is running in the hope that the times to come will be better and not better. As economic activities are starting and businesses are starting to open, the market is hopeful that the earnings of companies will be better than before.
Now the situation is almost becoming normal all over the world. The USA, UK, and China are showing recovery in all these big economies. The Central Banks of the USA and UK jammed and printed money and tried to help their common people in every way. Interest rates were reduced to 0, inflation was ignored and growth was completely kept in mind. The Government of India also gave an economic package of Rs 20 lakh crore to the people of the country. And there are hopes that due to the second wave of COVID, once again a partial lockdown had to be imposed in the country, and a second economic package may be announced soon.
Friends, the market always determines its move by looking at the coming time. At this time the market is not looking at what the earnings growth of the companies will be in 2021. The market is keeping in mind the growth of the coming 3-5 years. Anyway, our country is a developing country that has full potential for growth, hence FII, FPI, and other institutional investors have invested money.
Friends, one more thing has changed during this period and that is that our domestic investors and retail investors / TRADERS have increased their participation in the market. There was a time when only FIIs used to make our market rise and fall but now it is not so. If you look at the figures, from January 21 to April 21, FIIs had withdrawn money but still, our market remained high continuously.
During this one year, record-breaking demat accounts were opened and there is every possibility of record-breaking demat accounts being opened in the future also.
The two main reasons for such a rise are the influx of liquidity in the market, that is, a lot of money was printed in foreign countries and FII investors invested that money in our markets and the second reason is the increase in participation from our retail investors. Many people are afraid that the market has climbed so much that it will fall down, but let me tell you friends, nothing like this is going to happen, now the market will run only forward, and maybe small corrections keep coming in the market, but now there will be a big fall in the market. I will not be there.
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