It did look like bullishness had returned to the markets all over again as the Sensex built up 1600 points in just about a week of trading. Sensex rallied by 466 points on 06 July led by stocks like HDFC Bank and Reliance Industries. Other stocks from IT, banks and heavyweights like auto helped as M&M played the rural game to the hilt.

Of course, the real reason was geopolitical. The trigger for the stock markets came from the announcement that both India and China had chosen to withdraw from the Line of Actual Control or LAC. This had been a major geopolitical risk for Indian markets and the markets had been jittery since the Chinese incursions first began in late May.

As much as this is a diplomatic victory for India, there is also a sigh of relief for the markets. At this stage of the economic slowdown , nobody really wanted a full-fledged war. However, there is a major concern in that India has now emerged as the third most COVID infected country in the world after the United States and Brazil, overtaking Russia.