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Indian Indices Trade Flat; Healthcare Stocks Witness Buying
Thu, 1 Jun 11:30 am

Indian share markets are presently trading marginally higher. Sectoral indices are trading on a mixed note with stocks in the metal sector and oil & gas sector witnessing most of the selling pressure. Healthcare stocks are trading in the green.

The BSE Sensex is trading up 17 points (up 0.1%), while the NSE Nifty is trading flat. The BSE Mid Cap index is trading up by 0.5%, while the BSE Small Cap index is trading up by 0.9%. The rupee is trading at 64.44 to the US$.

Most of the volatility in the Indian share markets is seen on the back of the release of a poor set of GDP numbers. Losses were also seen after data showed a sharp decline in April core sector growth.

As per the data released by Central Statistics Office (CSO), Gross Domestic Product (GDP) in the January-March quarter grew at the slowest pace in at least four quarters at 6.1%. This was as against a 7% growth in October-December.

The GDP growth, with revised series, was dragged down by construction, manufacturing and trade services.

The above lower-than-anticipated fourth quarter GDP number reflects the lingering impact of demonetization, as was predicted by economists.

The poor GDP growth also stripped the country of its status as the world's fastest-growing major economy. Annual economic growth at 6.1% was lower than China's growth of 6.9% for the first three months of 2017.

The chart below throws up a startling revelation.

China Way Ahead of All Emerging Markets

India's share grew from 3.9% to 7.2% of world GDP over the last twenty years. That's just a 3.3 percentage point increase.

Just this one statistic tells us how much India needs to grow if we are to catch up with China. In fact, there's a strong argument which indiactes we may never catch up with China. However, we are confident that even if we don't match China, there will be many opportunities to create wealth in the Indian markets.

For those investing based on macro clues, these are times to be a little skeptical. What you see could be too good to be true. It could also be a very slippery premise for one's investment thesis. Ask superinvestors who have consistently beaten benchmark indices.

But who are these super investors? And more importantly, how do they pick stocks? Which stocks are they picking?

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Our research analysts Kunal and Rohan have been working on a project to answer this. They have travelled the length and breadth of the country to interview a bunch of value-oriented investors who've had tremendous success with investing.

To get an insight, download your free copy of The Super Investors Of India today.

In other news, as per an article in the Economic Times, India's per capita income grew by 9.7% to Rs 1,03,219 in 2016-17 from Rs 94,130 a year ago.

In real terms (at 2011-12 prices), per capita income in 2016-17 rose 5.7% to Rs 82,269, against Rs 77,803 a year ago. The rate of growth in real terms was, however, slower than 6.8% in the preceding year.

The above news bodes well as a rise in per capita income indicates a rise in prosperity of a country.

However, despite the above rise one shall note that India isn't creating enough jobs. And that can very well lead to a big unemployment crisis which can derail the growth of the Indian economy. And the situation of unemployment over the past many years has hardly changed.

As per Vivek Kaul's analysis, a little over 12 million individuals will keep joining the workforce every year in the years to come. This works out to around one million a month. And at this rate, the Indian workforce is expected to be larger than that of China by 2030.

The demographic dividend benefits a country if the government of the day is able to create the right environment in which jobs are created. And from what we see, we are failing miserably on this front.

But this is not the only crisis hitting India's economy now. To know more, refer to Vivek's special report.

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

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Nov 24, 2017 (Close)