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GDP growth trend : What to expect?
Nov 30, 2015

There are two key events scheduled this week that the stock markets are watching with bated breath - GDP data for the September ended quarter and central bank's monetary policy. So, what should investors expect?

As per the analysts polled by Reuters, the GDP data is likely to show some improvement. Even as corporate results continue to disappoint, the broader economy is expected to do well. As per an article in Livemint, slight improvement in bank credit and healthy rail and air traffic are likely to offset the negative impact of contraction in exports.

While markets may cheer this in the short term, quarterly data is unlikely to reflect the long term trend in economic growth and recovery. Any improvement in growth in the quarter is more likely to be consumption-driven than investment-driven.

We believe investors would do well to focus on real reforms happening at the ground level and stick to bottom-up approach for investing in stocks rather than tracking quarterly data points and arriving at conclusions.

Data Source : Livemint, CSO

This Chart Of The Day was published in The 5 Minute WrapUp - What does GST really mean for you?

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