Market quote by Hemant Kanawala, Head - Equity, Kotak Mahindra Life Insurance Co. Ltd.

“Last 2 months have been very challenging for India due to wave 2 of covid infection and lockdowns announced by state governments to control the spread of infection. On the positive note, Covid infection in India in terms of new cases, active cases and mortality has come down sharply over last 1 month. There has been dramatic improvement in the vaccination rate lately and till date, India has administered 30 crore doses of covid vaccination. As the pace of vaccination improves over the next quarter, there is an increased probability of complete opening up of the economy into the festive season. Another positive news for the economy is the prediction of  normal monsoon by Indian Met department, which should greatly help rural India where the impact of wave 2 of covid infection has been more than wave 1. Increase in vaccination rate and normal monsoon should support strong economic growth in 2nd half of FY22. Nifty 50 is trading at more than 20 times 1 year forward earnings, which is close to historic high and supported by low interest rates in India and globally. Last week, US Fed has started discussing path for reducing liquidity support, which it has been providing for last 1 year to stimulate growth. As and when they announce their roadmap, it can bring volatility in risk assets including emerging markets and India.”