09 DEC,2019 | MEDC
While the markets are currently at a high, the economy is at a low. Such a divergence between Wall Street and Main Street is not uncommon. Indeed, there are occasions when it is even to be welcomed. This is because stock markets move more based on perception rather than on fundamentals. The markets often lead the real economy. What the markets are likely telling us is that we have seen the worst, and that the best is now ahead of us. This optimism is not warranted on viewing our economic indicators, as all that one sees is a slowdown everywhere. The markets are probably betting that the Indian economy will bounce back. That is a reasonable assumption to make, considering that what we are undergoing is almost certainly a temporary phase in our economic history. This too shall pass.
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