Bear Market Rally or a New Bull Market?

Among all the negative news globally, the frontline indices of Indian equity market are up by almost 16 per cent from their recent lows attained in the mid of June. Most of you would be wondering if the current momentum in the market marks the end of correction that started last year in the month of October or are investors being suckered by a bear market rally? The most common understanding of a new bull market is marked by a 20 per cent gain from the low for a sustained period of time. We are quite a few percentages away from that.

Aiding the Indian markets’ recovery is a steady flow of good results and a reversal of the trend seen in FII activity. The FIIs had been sellers for the past nine months and turned net buyers in Indian equities to the extent of Rs 4,989 crore in July against sale of Rs 50,203 crore in June 2022. Even in the month of August till date we have seen FIIs’ money pouring in. Our cover story in this issue highlights the positive momentum in the equity markets triggered by the return of the FIIs

The current issue is a special issue as we bring to you the thoughts and views of some of the most sought-after business leaders in India. Leading and revered CFOs of some of the most established companies in India have discussed at length their views on economy, market and most importantly, their company’s growth strategy in the ongoing turbulent times. I am sure you will thoroughly enjoy the unique inputs shared by the brilliant financial minds of corporate India. In addition, this issue honours the best CFOs in various categories in the ‘Best CFO Awards’ section. 

The Indian economy is thriving if we go by the PMI manufacturing data. PMI manufacturing started the quarter on a good note with the index rising to an eight-month high of 56.4 in July from 53.9 in June. With GDP growth expected to be amongst the fastest in the world, India is bound to attract inflows from overseas in the coming months. The earnings’ growth has been good and rising inflation fears are well-discounted. Also, two important factors – advance decline ratio and the number of companies touching new 52-week highs and lows – indicate that the overall sentiment in the market is improving, and we may have turned the corner until and unless another black swan event strikes us.

I would like to take this opportunity to reproduce excerpts from my editorial in our issue Vol. 37, Issue No. 08, penned on March 8 when the Sensex was about 52,900: “The markets are again going to bounce back with a vengeance. Thus, we would advise our investors to continue to ‘buy’ through this opportunity.” And another one reminding people who missed the opportunity as published in Vol. 37, Issue No. 13, penned on May 16 when the Sensex was again near 52,900: “Harness the value that awaits you.” I am sure many of our readers have made the most of this market recovery. Continue to stay tuned and happy investing.
 

RAJESH V PADODE
Managing Director & Editor