Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

The global economy is still in danger
Tue, 6 Apr Pre-Open

Has the global economy come out of its slump? Will it witness a W-shaped recovery? When should various governments withdraw the fiscal stimulus? These are some of the important questions that have given everybody across the world food for thought. And while the answers have not been easy, they have certainly been varied. After all, it is difficult to take a call as to when the global economy will once again witness those glory days before the crisis erupted. Infact, many are of the view that we may never see those days again and will have to contend with a new normal.

While many noted economists have expressed opinion on the subject, the IMF chief Dominique Strauss-Kahn has also ventured forth his view. Which is that the global economy is not completely out of the woods yet. Sure, some signs of recovery have been evident. But those have been more a product of government spending and support rather than demand from the private sector. Infact, if one takes a look at the US, the small recovery signals that have been observed have been largely a result of government stimulus measures. Demand there has been quite subdued due to reduced incomes and a high rate of unemployment.

Thus, while there are talks about a double dip recession doing the rounds, the IMF chief also acknowledges that the same cannot be ruled out. At the same time, the IMF has not predicted such a double dip recession over the next two years. Infact, as reported in a leading business daily, the IMF has estimated that the world economy would expand by 3.9% in 2010 and this will ramp up to 4.3% in 2011.

Then many countries have another problem to contend with: a rising fiscal deficit. This is visible not only in a developed country like the US but also an emerging economy like India. The US intends to follow an expansionary monetary policy for an extended period of time. It has argued that inflation is not really a problem for the time being given that demand is depressed. But as and when the US recovers and the Fed does not do much in terms of tightening its purse strings, then higher inflation and the perils that it brings along with it will be another problem that the US will have to deal with.

The emerging economies also have their own set of problems despite the fact that they are touted to grow much faster than their developed peers. China runs the risk of fuelling higher inflation given the huge stimulus measures pumped into its economy and the indiscriminate lending by banks to asset classes such as real estate where a bubble has already begun to form. India has been plagued by a rising fiscal deficit along with higher inflation, which poses many problems for the Indian government.

Thus, it seems increasingly likely that the world economy will not revert to those heady days but will have to settle for a new state of things. Even if some of the pressing concerns get resolved in the near future there could be graver risks lurking around the corner. This means that governments and central banks will have to make some important decisions in the months to come if another crisis of the scale we have witnessed has to be prevented going forward.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "The global economy is still in danger". Click here!

  

Stock Market Updates

ONGC Share Price Down by 7%; BSE OIL & GAS Index Down 4.0% (Today's Market)

Feb 26, 2021 03:34 PM

ONGC share price is trading down by 7% and its current market price is Rs 118. The BSE OIL & GAS is down by 4.0%. The top gainers in the BSE OIL & GAS Index is CASTROL INDIA (up 1.3%). The top losers are ONGC (down 7.1%) and GAIL (down 6.3%).

ULTRATECH CEMENT Share Price Down by 5%; BSE 500 Index Down 3.4% (Today's Market)

Feb 26, 2021 03:30 PM

ULTRATECH CEMENT share price is trading down by 5% and its current market price is Rs 6,487. The BSE 500 is down by 3.4%. The top gainers in the BSE 500 Index are SOUTH IND.BANK (up 10.4%) and JAGRAN PRAKASHAN (up 10.0%). The top losers are ULTRATECH CEMENT (down 5.0%) and BAJAJ FINSERV (down 6.3%).

JAGRAN PRAKASHAN Share Price Up by 10%; BSE 500 Index Down 3.2% (Today's Market)

Feb 26, 2021 03:26 PM

JAGRAN PRAKASHAN share price is trading up by 10% and its current market price is Rs 60. The BSE 500 is down by 3.2%. The top gainers in the BSE 500 Index are JAGRAN PRAKASHAN (up 10.1%) and RCF (up 11.0%). The top losers are MAHINDRA CIE AUTO. and AJANTA PHARMA (down 0.1%).

UPL Share Price Down by 5%; BSE 500 Index Down 3.2% (Today's Market)

Feb 26, 2021 03:26 PM

UPL share price is trading down by 5% and its current market price is Rs 589. The BSE 500 is down by 3.2%. The top gainers in the BSE 500 Index are RCF (up 11.0%) and SOUTH IND.BANK (up 10.4%). The top losers are UPL (down 5.4%) and BAJAJ FINSERV (down 6.2%).

ICICI LOMBARD GENERAL INSURANCE Share Price Down by 5%; BSE 500 Index Down 3.2% (Today's Market)

Feb 26, 2021 03:26 PM

ICICI LOMBARD GENERAL INSURANCE share price is trading down by 5% and its current market price is Rs 1,479. The BSE 500 is down by 3.2%. The top gainers in the BSE 500 Index are RCF (up 11.0%) and SOUTH IND.BANK (up 10.4%). The top losers are ICICI LOMBARD GENERAL INSURANCE (down 5.2%) and BAJAJ FINSERV (down 6.2%).

Sensex Crashes 1,800 Points; Nifty Trades Below 14,700 Mark (Today's Market)

Feb 26, 2021 02:30 pm

The BSE Sensex is trading down by 1,464 points, while the NSE Nifty is trading down by 423 points.

View More Indian Share Market News

Most Popular

It's the Beginning of a New Bull Phase in Smallcaps(Profit Hunter)

Feb 24, 2021

Last time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.

Intraday Trading for a Living(Fast Profits Daily)

Feb 15, 2021

In this video, I'll cover your queries on intraday trading and also share my view on how to decide stop losses and target prices.

Top 5 Stocks Mutual Funds Bought and Sold in January 2021(Sector Info)

Feb 16, 2021

A look at what India's top equity mutual funds bought and sold in January 2021.

I Would Recommend this Small-cap Stock Over Tesla(Profit Hunter)

Feb 16, 2021

Do you enjoy reading Tesla and Bitcoin stories? Here's a not so famous small-cap stock to profit from the rise of EVs.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Feb 26, 2021 03:36 PM

MARKET STATS