X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks

MEMBER'S LOGINX

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

Why India is back on investor's radar?
Fri, 3 May Pre-Open

The mood of India's political and economic elite had darkened in recent months. Not only had growth slowed, but inflation was also not coming down. A sharp increase in the country's fiscal deficit and a yawning current accounts deficit had raised fears that India could be roiled by capital flight or even a balance of payment crisis.

However, some of these fears are subsiding now. The recent fall in the commodity prices may have come as a blessing in disguise for the Indian economy. A sharp fall in crude oil prices and crash-like situation in several other global commodity prices, mainly gold and other metals, have reversed the mood of gloom in India.

India is a peculiar country. Rather than riding on the commodity boom, its economic growth rides also on the bust. The positives of the commodity softening will work on manifold. First, it will bring down drastically the country's imports bill which is largely driven by crude oil and gold. The changing global situation coupled with already low demand in several industrial and consumer goods will bring down inflation. Thus making the Reserve Bank of India (RBI) cut the policy interest rates rather significantly.

The spin-off will be revival in consumer demand and reduction in the cost of production for the corporates, which will in turn lead to higher earnings. Thus, the cyclical factors will turn positives. The impact on improved earnings will be seen from the second quarter of the current fiscal.

As a result, deep-pocketed foreign funds are trooping back into Indian stock markets in the wake of expectations that Asia's third largest economy may have bottomed out and a recovery would revive investment, boost corporate earnings and ensure higher returns to investors.

The BSE-Sensex has risen more than 6% in two weeks and may continue the momentum with the weather department forecasting a normal monsoon this year. Bountiful rains, is crucial for all crops in the nation of more than 1.2 bn people. It will increase rural incomes which will lead to spending on a wide range of consumer durables.

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

Equitymaster requests your view! Post a comment on "Why India is back on investor's radar?". Click here!

  

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS