AN UNPLEASANT CONSENSUS

LEADING MARKET EXPERTS HAVE ALREADY LOWERED THEIR EXPECTATIONS FROM THE STOCK MARKET THIS YEAR, AND WHILE THEY BELIEVE THAT THE BULK OF THE CORRECTION IS BEHIND US, THEY ARE NOT YET READY TO PAINT A ROSY OUTLOOK

- ASHISH RUKHAIYAR

“IN THE LONG RUN, WE ARE ALL DEAD.” The author of this widely quoted sentence is celebrated 20th-century economist John Maynard Keynes, who is often referred to as the father of macroeconomics—the branch of economics that deals with interest rates, government spending, and taxes to manage an economy’s growth. The sentence is also perhaps best suited to reflect the current mood of the stock markets, wherein everyone, as always, is bullish on the long-term India growth story. But, there is a wide consensus among market participants on the near-term concerns related to interest rates, inflation, and economic growth.

If data is anything to go by, there are strong headwinds in the stock markets that also explain the tumultuous movement of Indian equity benchmarks that were, till recently, down over 18 per cent when compared to the all-time highs the indices touched last year.

A further 2 per cent fall, and the Sensex and Nifty would technically be in ‘bear market’ territory that is typically marked by long bouts of range-bound movement. The Nasdaq in the US is currently in a bear market zone, having dived nearly 29 per cent from the 52-week high of 16,212 it hit on November 22, 2021.

Back in India, the S&P BSE Sensex touched its all-time high of 62,245.43 on October 19, 2021, and on June 17 this year, it touched a low of 50,921.22—a drop of 18.2 per cent. To be sure though, the indices have partially recouped their losses, and are currently down around 11 per cent from their all-time highs.

CHECKING THE MARKET PULSE