Will the bull jump over the moon?

"India is now the world's sixth largest stock market, overtaking France for the first time in market capitalization, with the benchmark Sensex rising over 23% this year," News on Air. "India's market capitalization stood at $3.4055 trillion on Tuesday, September 14, 2021, compared to $3.4023 trillion in France, according to Bloomberg data. India recorded the biggest gain in market cap this year, registering more than $873.4 billion or a rise of 35 percent from $2.52 trillion on 31 December 2020. Since March 2020, India added nearly $2.08 trillion market cap or a 159 percent gain. In 2020, it added a market cap of $373 billion, or a gain of 17.4 percent from $2.14 trillion." Astronomical numbers. It is amazing because on 25 March 2020, India went into one of the strictest lockdowns in the world," Hindustan Times (HT). "The first set of curbs remained in place till April 14 and was extended four times, each time with gradual relaxations." In the first quarter (April to June) of the financial year 2020-21, India's GDP contracted by 23.9%, DD News. "India's gross domestic product (GDP) for the second quarter ended September 30 contracted by 7.5%, government data showed," Times of India (TOI). Over the financial year 2020-21, India's GDP contracted by 7.3%, wrote Udit Misra. "After the decline in the wake of the Global Financial Crisis, the Indian economy started its recovery in March 2013 -- more than a year before the present government took charge," but "the growth rate steadily fell from over 8% in FY17 (1 April 2016-31 March 2017) to about 4% in FY20, just before Covid-19 hit the country." So, the more the Indian economy slid downwards, the more was the rise in the stock market. "Reliance Securities head strategist believed that Sensex may cross 60,000 by the year-end," News18. This was on 25 August when, "The Sensex hit its fresh all-time high of 56,198.13 while the Nifty made a fresh peak of of 16,712.45 in intraday trade." "However, considering strong earnings outlook and possible recovery in credit growth and improvement in asset quality of bank, Sensex crossing 60,000 cannot the ruled out," said Binod Modi. No need to wait for the end of the year. The Sensex closed at 59015.89 on 17 September, Economic Times (ET). "While the Sensex touched a lifetime high of 59,737, Nifty reached new peak of 17,792 during the day," Business Today. May sound ridiculous, but by this logic the Sensex will reach infinity if economic growth sinks to zero. However, India is not alone. "According to the Bank of America Merrill Lynch's September Survey, global fund managers have turned bearish on the global economy. Expectations of global growth are now at a net of 13%, the lowest since April 2020. Also, this is a significant decline from a 91% peak in March this year," wrote Harsha Jethmalani. But "despite sluggish earnings growth and weak fundamentals, global equity market capitalization has shot up 75% to $119 trillion from the lows of March 2020, showed analysis by Motilal Oswal Financial Services Ltd." "Last year markets were driven by savings on the cost side, but now the enthusiasm is more of a demand pull," wrote Jimeet Modi. "Across industries, be it auto where supply is curbed due to the semiconductor shortage or real estate which is experiencing a significant offtake in inventories due to robust bookings, demand may turn out to be a big aid to margins. Whether pent-up or no pent-up, demand is demand, and the macros are playing a big role in driving enquiries." Surely if supplies are constrained, any demand will lead to a rise in prices and inflation? "The MSCI India index beat the MSCI World gauge of developed nations by more than six percentage points last month the biggest gap since 2018," wrote Akshay Chinchalkar and Nupur Acharya. "A tide of foreign inflows and domestic liquidity has helped fuel a a 132% surge in Indian stocks from their March 2020 pandemic lows." No wonder, a survey by ET showed that "Respondents felt India is stronger in (Prime Minister) Modi's leadership, and they feel more secure." English toddlers sing that the cow jumped over the moon. In India, it's the bull.