The Indian market has rebounded strongly since July, surging by more than 12% between July 1 and August 19. The broader Nifty50 gained 12.5% and 30-share Sensex rose by around 12.6% during the same time. Multiple factors, including FIIs returning to the India market, turned around the table. As on August 20, Foreign Institutional Investors bought to the tune of Rs 17,970.62 crore in the Indian market this month till August 19 against Rs 6,052.67 crore selling by the DIIs in the cash market.  

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Meanwhile, these factors also propelled the Sensex to reclaim the 60,000 mark and the Nifty50 to touch 18,000 level for the first time in the past four months. 

On Friday, putting a halt to an 8-day rally, the barometer indices ended lower by more than one per cent each. The Nifty50 closed at 17,758.45 with a 1.1% cut and the Sensex fell 651 points to 59,646.15.  

Speaking about what changed Sunil Damania, Chief Investment Officer, MarketsMojo, said the market sentiments have rekindled since July and remain bullish. "Substantial GST collections were one of the reasons why equity markets became bullish, in addition to strong direct tax collections. These factors indicate healthy economic growth, despite global economies struggling," said the expert.  

Also, the rupee has begun moving in a very narrow range after touching Rs 80, he said. "Taking wind of these positive factors, FIIs returned strongly in July and August and are likely to continue investing in India's growth story," said Damania. 

Speaking on Corporate earnings in Q1 FY23, Motilal Oswal believes earnings were a miss after several quarters, with some heavyweights from cyclical sectors driving the aggregate miss even as spread of the earnings and accompanying corporate commentary was good. 

"Good monsoons and a normal festive season after two years should augur well for Consumption oriented sectors. However, the growth is still lopsided and is being led by BFSI. As the benefit of the recent moderation in commodity cost starts to accrue in 2HFY23E, we expect other sectors like Consumer, Autos and Cement to contribute too," said the brokerage while deducing the Quarter one earnings.  

Irrespective of Motilal Oswal and many market pundits, MarketsMojo CIO believes India Inc's earnings have been reasonably admirable for the quarter ended June. "Even though market pundits think otherwise, considering the environment under which India Inc. has operated – global uncertainty, high crude oil prices, rising interest rates, and other concerns, India Inc. delivered YoY growth both in topline and bottom line." he pointed out.  

We also witnessed a growth in the topline for the June quarter-on-quarter," said the expert.  

"We believe there is great merit in India Inc's growth story, and in that regard, we opine that Sensex could touch 65000 by December 2022," the expert added. 

Hemant Kanawala, Senior Executive Vice President & Head Equity, Kotak Mahindra Life Insurance Company Limited said the recently concluded earnings season saw healthy sales growth, with some pressure on profitability arising from high energy prices. Owing to recent correction in crude prices, pressure on margins should ease off over next couple of quarters, he said. "Going forward, all eyes will remain on domestic recovery. Upcoming festive season demand is something markets will watch out for. The festival season demand is expected to be buoyant as this is the first normal festival season post COVID-19 and rural segment may see buoyancy on back of strong monsoon,” he added.

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