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How Does Inflation Impact the Stock Market?

The financial landscape of the modern world is highly complex. With more information available to investors due to the penetration of the internet in most rural areas, investor sentiment is now driven by analysis and data as opposed to an emotion-driven response. A classic example of this is inflation. Traditionally, most people regarded inflation as a sign of an unhealthy economy. However, today, investors are better-informed and understand economic cycles making prudent investing decisions at every stage of the economy of the country. Today, we are going to talk about inflation in general and assess its impact on stock markets in India. Understanding Inflation:- In the simplest terms, Inflation is the gradual rise in the prices of goods and services. When the inflation rate increases, the cost of living increases too, which leads to lower purchasing power.  For example, If Apples sold at Rs.100 per kilo in 2010, then in an inflating economy, they would cost more in 2020. Let’s say th