May 12, 2008|
Market worries, business hopes & more
What's worrying the markets?What's keeping policymakers worried?
There's no stopping the spectre of rising inflation as it continues to cast its spell on Indian stock market. Rising prices of fuel and food and now a sharp depreciation in the currency has led to enhanced fears regarding inflation touching even higher levels. And even then, it is important to note, the inflation figures (measured by wholesale and consumer price indices) outlined by the RBI (Reserve Bank of India) and other statistical organisations remain understated, for facts like the rising crude prices that have not been passed on to the consumers by way of higher prices for petrol, diesel and kerosene.
In this scenario, stocks from the oil and gas and rate sensitive sectors have been particularly hit. Pressure on stocks of companies that require high levels of capital investment is also showing no signs of abating. And then there is the fear of the economy slowing down on the back of high interest rates that have curbed money demand, both for consumption and investment. Without trying to sound overtly unnerved about these issues that dog sentiments, we believe that the pain is here to stay for the short to medium term.
Oil's boiling overWill the boiling oil spill over?
As experts at Goldman Sachs, the US investment banker, discuss the 'super spike' that crude prices can take en route to the US$ 200 per barrel mark over the next 6 to 24 months, the commodity is showing no signs of costing any lesser than its current highs. Factors that have kept oil at the current high levels (of nearly US$ 120 per barrel) include – continued strong demand from guzzlers like India and China, supply side issues from oil's largest producers, and of course, the US Federal Reserve induced dollar hammering that has led to speculative buying in crude and other commodities.
To make things simpler, since most of the world commodities are traded in US dollar terms, depreciation of the greenback makes its cheaper to buy these commodities, even when the users are finding it difficult to bear the 'rising' prices. Not only crude, you name a key commodity and it has witnessed a sharp spike in prices over the past few months – steel, copper and aluminium to name a few.
Taking the India model abroadUnderstand fundamentals of identifying a telecom stock
The news concerning Indian telecom major, Bharti acquiring a major stake in its South African counterpart, MTN, is heating up. The fact that the Indian company is aiming to replicate its low cost model across other geographies with similar income levels as India, is a rationale that carries much weight. As a matter of fact, India is adding 3 mobile subscribers every second. This is up from 1.5 four years back.
Unlike most of the consumption stories doing rounds in India and which show huge potential in the untapped rural markets, home to two-thirds of the country's one billion-plus population, the increasing penetration of mobile telecom services is being acted out in reality. In rural India, carrying a US$ 20 mobile phone can be something of a status symbol. This is clearly indicative of the much-larger drama unfolding in the Indian telecom market, once considered a backwater and now the fastest growing in the world.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 24, 2017
Kelly, Mattis, McMaster, Cohn, and Mnuchin are in charge. But these Pentagon bureaucrats and Wall Street hustlers may be worse than a loose-cannon president.
Aug 23, 2017
Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?
Aug 23, 2017
Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.
Aug 22, 2017
It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.
More Views on News
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Aug 16, 2017
The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Aug 22, 2017
Post demonetisation, a cut in bank savings deposits rates was in the offing.
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407