Current Scenario of the Indian Stock Market

India’s stock market ecosystem is at an all-time peak. Retail investors are increasing at a fast pace, the new age discount brokers like Zerodha have been showing prominent growth and other facilitators like online financial news and education has at an all-time high as well.

The COVID pandemic has played a major role in the sudden boom of the Indian stock market. Due to lockdown restrictions, with businesses shut down and all sources of income dead, people were exposed to this new avenue to multiply and grow their bare funds. During the lockdown, most number of Demat accounts were opened with Zerodha, like never before. Seeing the prospects of increases earnings, new and new retail investors kept on entering the market, thereby contributing in the stock market boom.

This also led to the realization of the importance of financial literacy in order to invest in the markets and make profits. As a result, organizations facilitating online financial news and education experienced a never before exponential growth.

In the past 1 – 2 years, India also witnessed an increased foreign investment in the stock market, thereby contributing in the rally. Foreign brands have started shifting from China to India, thereby contributing in the boom.

Due to poor performing Indian economy, returns on FDs, government securities and PPFs are very low. Hence, equity proves to be a great alternative.

At present it is analysed that currently we have a stock market bubble. Shares of various companies are overvalued and several investors suspect a future correction. Hence, it is important that certain reforms and regulations are brought in this regard in order to safeguard the hard-earned money of the investors.

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