Unleashing the bulls: How the stock market achieved unprecedented record levels

economictimes.indiatimes.com:

Market Volatility and Exogenous Factors:Market volatility primarily stemmed from exogenous factors. Global monetary and fiscal tightening measures were implemented across countries (with few exceptions) to manage persistent inflation. The shocks caused by the Russia-Ukraine war and China's Covid restrictions also contributed to volatility.

Furthermore, the global economy slowed due to aggressive rate hikes undertaken by central banks in advanced economies to control anticipated transitory inflation. These circumstances led to unbiased selling in emerging markets as investors sought safer assets with higher yields, further exacerbated by the strengthening of the US Dollar. The collective occurrence of these events elevated the geoeconomic risk landscape to structurally higher levels.Emerging Opportunities for India: Fortunately, emerging economies like India, with comparatively stronger fundamentals, have experienced a shift from headwinds to tailwinds, resulting in a fortunate and unexpected turn of events.

Inflation has sharply declined at the retail level and is deflating at the wholesale level. Domestic interest rates are likely at their peak, while central banks in advanced nations are considering further hikes, potentially sacrificing growth. Commodity prices have cooled and stabilized from their peaks, and the US Dollar is expected to weaken relative to other currencies.

Bond yields have fallen amid a stable monetary policy outlook.Driving Factors for Indian Equities: Domestic stocks are reaching new highs due to a stable macro environment, a growing economy, and healthy corporate profits. These factors have attracted substantial institutional investor inflows. Over the last decade, the Indian economy has undergone