How RBI Is Helping Fan World-Beating Share Market Rally

Investors are betting the easy money won't end anytime soon, with RBI Governor Shaktikanta Das keeping a lid on dissent as he nurses the economy back from its pandemic lows.

The Reserve Bank of India is helping to fan a world-beating share market rally with record-low interest rates and huge injections of liquidity -- even as inflation threatens to break back out of its target range. Investors are betting the easy money won't end anytime soon, with central bank Governor Shaktikanta Das keeping a lid on dissent as he nurses the economy back from its pandemic lows. Overseas funds have poured $7.2 billion into the nation's equities this year and net inflows are expected to continue. The market for initial public offerings is on a tear, thanks to a frenzy of interest in startups, and India looks set to attract investors who've been scared off by China's regulatory crackdown. Domestic institutions are also piling in, along with retail traders, contributing to a record $3 billion that funneled into equity funds last month. While India has suffered a staggering toll from the coronavirus, individual investors by the millions are rushing into stock trading with savings built up during lockdown. “The market is fueled with liquidity, which will absorb a fall, if any,” said Ashish Chaturmohta, director of research at Sanctum Wealth Management Pvt. in Mumbai. “Enough money has been pumped in to support the economy and many sectors are seeing continued growth with great future prospects.”