Indian Equities Sustaining the Bull Run The financial authorities across the world took charge and

d resorted to desperate measures to do whatever it took to save the economy from collapsing. In that juncture, what was required most was injecting ample liquidity into the financial system so that the cascading effect of crisis could be averted. The timely monetary and fiscal stimuli, access to information and proactive financial regulators across the world, made it possible to avert the 1930 kind of depression. The money injected into the financial crisis has now started finding its place with different asset classes across the world such as equities, gold, silver and other asset classes. Many peripheral countries which followed sound macroeconomic policies have started attracting large capital inflow, and in recent years have enjoyed fast economic growth. Emerging market economies such as India and China have received huge fund flows. Indian stocks have outperformed their BRIC peers Brazil, Russia and China so far in 2010. Statistics show that India has emerged as the best performing market across the world year to date. The euphoric experience by the Indian capital markets is evident in the strong performance of benchmark indices, above average valuation, unprecedented FII flows, large IPO subscriptions, increased traded volumes, and so on. Not only this, the year 2010 is seen among the best years in terms of rainfall and strong industrial production also. The advance tax collection numbers reflect higher profits and are indicator of the fact that India companies are poised to report another period of corporate growth. Indias GDP growth rate slowed down to 7.2 per cent in January - March 2011. A rapid increasing middle class with buying power ignites a rapidly growing consumer market and stronger GDP growth. On the other hand, the fundamentals continue to improve, the liquidity-based and momentum-driven. It is perfect for bulls playing short term games. The foreign investors and Indian markets are behaving like newly married couple, completely besotted with each other. The investors in West having starved for growth in their home countries are continuing to frequent emerging markets. Due to persistent inflation and monetary tightening have seen the BSE benchmark index, Sensex, lose 2,000 points in the last five months. FIIs have pulled out $1.44 billion in May 2011 alone. However, the pace and the strength of the rally have surprised everybody. Some sections of investors/market participants have raised concerns regarding valuations and sustainability. Among BRIC countries, India is the costliest market. The EPS growth for Indian companies is expected to be at least 21 % for fiscal 2011. With economic growth gaining momentum and inflation accelerating, economists expect India to be one of the first countries to raise interest rates. The WPI rose 1.34 % in October 201o, and is expected to climb to 6 % by the end of the current fiscal, prompting the RBI to rein in its easy monetary policy. Despite these countries, as the risk appetite increases and confidence returns in the financial markets, investing in emerging markets has become increasingly appealing. Sound fundamentals and a strong economic outlook should help India outpace the developed worlds economic growth and provide attractive opportunities. Questions: 1) What are the fueling factors, which has a greater impact on the Indian economy? 2) How long will the Bull run persist in the market?

Abstract The rally in stock markets may continue as long as central banks across the developed countries keep interest rates at record lows, helping investors borrow cheap and invest in high-yielding emerging markets. It has been over two years, since we struggled our way out of the financial crisis of 2008. As the events of the financial crisis are getting unfolded, it is getting clearer that post the Lehman Brothers bankruptcy, the world suffered a `temporary cardiac arrest'. The financial authorities/central bankers across the world took charge and resorted to desperate measures to do whatever it took to save the economy from collapsing. At that juncture, what was required most was injecting ample liquidity into the financial system so that the cascading effect of the crisis could be averted. The timely monetary and fiscal stimuli, access to information and proactive financial regulators across the world, made it possible to avert the 1930 kind of depression. The money injected into the financial system to avoid the financial crisis has now started finding its place with different asset classes across the world such as equities, gold, silver and other asset classes. Many peripheral countries which followed sound macroeconomic policies have started attracting large capital inflow, and in recent years have enjoyed fast economic growth. Emerging market economies such as India and China have received huge fund flows. This has ensured Sensex to rally from its 2008 lows of 7700 levels to the recent 21000 levels indicating a return of 173% in a matter of just 24 months. Indian stocks have outperformed their BRIC peers Brazil, Russia and China so far in 2010. Statistics show that India has emerged as the best performing market across the world year to date. The euphoric experience by the Indian capital markets is evident in the strong performance of benchmark indices, above average valuations, unprecedented FII flows, large IPO subscriptions, increased traded volumes, and so on. Not only this, the year 2010 is seen among the best years in terms of rainfalland strong industrial production also. The advance tax collection numbers reflect higher profits and are an indicator of the fact that India companies are poised to report another period of corporate growth.

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