To buy Customized Research reports, please email: or call: 9701063320

Saturday, 12 December 2015

Is India the silver lining for the slowing global economy?

BSE Sensex and Nifty both fell below their respective psychological barriers of 25000 and 7600 respectively on Friday. Investors are just thinking; what if there crude oil touches $ 20 or FED raises its interest rates steeply or China slows down further. But aren’t we over-reacting. Okay foreign investors need to worry as US interest bearing instruments will give better returns and they need to re-balance their portfolios. Of course markets will be affected but it will be a short term impact. Coming to crude oil, Brent crude is $ 40, so let’s make hay till the sun shines. With lower CAD and fiscal deficit, government can drive more into public expenditure contributing towards investment and production.  

The huffing and puffing of the second largest economy has been impacting global economic health. Lower domestic demand is also forcing China to export excess steel, aluminum and petroleum impacting commodities prices worldwide. China became economic powerhouse on the basis of its exports and high availability of skilled cheap labour. Things would have been different if China had concentrated more on its domestic consumption.

Inspite of all these problems, India is still favorable investment destination, WHY? Because we mitigate their systematic risks. We have a stable macro economy which will be galloping in the next two years and our vibrant primary market should be taken as the best lead indicator for future growth. Companies have raised close to Rs. 13000- 14000 crore in 2015, which is one of the best performances of Indian IPO market over the last five years. Even IIP numbers for October  (10.8%) predicts a silver lining not only for us but also for the rest of the world.   

No comments:

Post a Comment