Making sense of stock market in view of a high growth rate

RBI has upgraded its forecast for the GDP growth to 6.8%, which should provide some confidence in the market that conditions are improving

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The hope today is that with the festival season having begun, there will be better times for the market.

This can be one major factor responsible for limited traction in the indices. Ultimately, profits need to increase on a continuous basis to justify higher stock prices. Presently, there is a distinct dichotomy in corporate performance where, on the manufacturing side, infra-based sectors are doing well, which is not the case with the consumer-based ones. This also means that their performance in the coming quarters would be tracked closely by the market after all the measures that have been taken by the government.