In the last 15 months, the stock market has seen a good rally which can be due to quantitative easing done by the US Fed or other Governments. They have infused a good amount of money in the market by purchasing the bonds of various companies this has led to a marvelous rise in the stock market throughout the world.
The 2 Events which can decide Stock Market Direction are:
1. Hockey Stance:
- The Government will raise the interest rates to tackle the rising inflation in the economy and tapering will be done.
- They will start selling the bonds which they have bought to introduce quantitative easing in an economy.
- Recently, the executive of the Central Bank of Richmond Mr. Thomas Barkin has said that that the Fed has done substantial progress in inflation targets.
2. Improving Situation in Countries:
- The European Central Bank has also decided to end the sudden buying of bonds from the market.
- The emerging economies are still facing more pandemic pressure than the developed economies of the world.
- Countries like Indonesia and other developing markets like India are yet to come out of the pandemic.
As India has still not recovered from the pandemic situations, the easing situations will prevail for some time. After that, we can expect some consolidation or little correction to take place in the stock markets. Do consult a financial advisor for all investment-related consultations or do proper research before making any investment at this point.