Sensex @ New Life-Time High

Factors which are Driving Stock Market UP

Introduction:

On Thursday 23^rd September 2021, the Indian Stock Market Indices Nifty and Sensex rose by around 1.57% and 1.63% respectively. which is inching towards the mark of 18,000 while the BSE Sensex closed at 59,885.36. The Next day i.e., Friday 24^th September 2021, the Sensex has crossed the levels of 60,000 for the first time whereas Nifty is heading in pace towards the 18,000 levels, and is just a few points away. Rally was broad-based, with mid-caps and small-caps also witnessing sustained buying.

Factors Driving Stock Market UP:

i) Expected Federal Reserve Announcement:

• The Indian Stock Market opened on a positive note tracking the global cues.
• Major reason behind this positivity was the favorable outcome of the Federal Open Market Committee (FOMC)
• Meet wherein the Federal Reserve announced that the US Central Bank can start. Quantitative Easing Tampering could start from December 2021 and completed by mid-2022.
• The rise in interest rates of debt instruments, there will be the development of alternative investments classes.
• As per some readings & reports, when the Interest Rates were hiked every year between 2003-2008.
• The equity market was also performing well despite increased interest rates due to Good Global GDP Growth.
• scenario is anticipated by the market participants in the current market situation where economic activities have become normal.
• The overall global economy is on a growth path.
• Here due to sluggish economic activity in FY21, the growth numbers in the current fiscal are looking attractive.
• Hence,The market is trying to implement it through stock market activity.

ii) Some Relief in China’s Evergrande Issue:

• China’s Property Developer China Evergrande has also announced that it has resolved the payment crisis as of now and has also paid a small part of its dues.
• To add, the next payment of Evergrande is due on September 29^th and October 4^th and it will again test its payment crisis issue.
• Besides that, the People’s Bank of China has infused the liquidity of $14 Billion in the banking system which will moreover address this liquidity issue in China.