Revival hopes help markets continue their winning run, absorb GDP shocker

While the GDP data is released with a two-month lag, markets always try to factor in future expectations

The markets have managed to continue their winning run despite faltering economic growth. For the three-month period ended September, the country’s gross domestic product (GDP) grew at 4.5 per cent, its slowest pace since March 2013. 

The market, however, has largely been unperturbed by the GDP shocker. Economic conditions are key to market performance as strong GDP growth results in strong corporate earnings — a key driver for share prices. Then what explains the optimism in the market? 

Hopes of revival and earnings growth in 2020, surprise tax cuts, and robust foreign flows — thanks to easy global monetary policies — are