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

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

This recovery is not worth cheering
Fri, 25 Oct Pre-Open

Numbers don't always tell the real story. This is evident from the recent gains that Indian stock markets are witnessing. Despite the mess in the economy and no near term positive triggers, the markets are touching new highs. This is hardly any factor to rejoice because most of these are on account of hot money finding its way into the country.

The US' recent decision to postpone the tapering has renewed foreign instituitional investors' interest in Indian stock markets that have returned in search of relatively higher gains. In contrast, the fundamentals back home hardly seem to have improved. Due to multiple blocks like lack of reforms, poor policies and bureaucratic delays, the investment climate in the country remains bleak. Unless the new investment projects take off, the growth in the economy is likely to remain muted. In short, there is no solid reason for foreign investors to remain invested. It is just a matter of time before these big investors pull out their money out of the country.

As an article in Business Standard suggests that things would have been different if we could instill confidence in the country's real productive capacity and received more of foreign direct investment instead. With around 6.7% year on year growth in FDI in the first seven months of the year, statistics might not portray too dismal a picture in this regard. However, on going a little deep, one would realize that this growth is quite skewed; and has mainly happened on account of a few big MNCs raising stake in their respective Indian arms.

What the numbers do not capture is the huge opportunity loss that the country has seen on account of failure of ambitious projects like Posco's Karnataka steel plant and Arcelor Mittal's in Odisha. Because of the lack of friendly investing climate and complex policies, India has not seen much investment despite the relaxation in FDI limits.

The only way out it seems is for the government to take timely action to kick start the stalled projects and rekindle the interest of the global investors in the domestic economy.

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

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "This recovery is not worth cheering". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (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, Canada or the European Union countries, 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.