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

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

  • MyStocks


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

Does this signify end of India story?
Tue, 29 Oct Pre-Open

Diwali is a festival of lights and colors. Traditionally the festive season is when most people concentrate their purchases. In fact, 30-40% of the annual sales for most retailers and consumer electronics manufacturers happen in this period. However, this time around the situation appears to be grim. Sales figures of top retail chains are faltering resulting in huge inventory pile ups. In fact, in some segments growth has even halved compared to the last year!

So, why is the urban middle class reluctant to spend this time around? Rising food inflation and interest rates has lowered the disposable income in the hands of consumers. And this is precisely the reason for slowdown in discretionary spending. Even freebies and discounts are unable to lure customers to shop.

It is important to note that a large part of the India growth story has been based on the consumption theme. However, considering that consumers have become more circumspect in spending on discretionary purchases the growth story has again come under the scanner. It should be noted that consumption is an important component of GDP growth. Hence, if consumption suffers, so will growth. Now we all know that India's FY 13 growth of 5% was decade low. With slowing consumption one would not be surprised if growth figure again comes under pressure in the coming years.

So, if the growth story has to be revived, consumption should pick up. And in order to boost consumption, disposable income should be increase. This happens when inflation is under check and there are strong employment opportunities. But unfortunately India is struggling on both counts.

The ugly truth is that inflation, especially food inflation, is hurting the common man. Also, with most businesses slowing down due to non-conducive operating environment like high interest rates and red tapism, employment opportunities have narrowed as well. All these factors have made consumers circumspect over their spending habits.

While cut in discretionary spend is a natural phenomenon during slowdown. However if it persists resulting in delayed consumption, India story is likely to suffer in the long term.

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 "Does this signify end of India story?". Click here!


Views on News

Why Rising Bond Yields Spooked the Market (Fast Profits Daily)

Mar 2, 2021

The stock market has been worried about rising bond yields recently and for good reason. In this video, I'll tell you why.

Bond Yields Are Surging. What Should Be Your Debt Funds Strategy (Outside View)

Mar 2, 2021

Bond Yields are surging. PersonalFN explains the outlook for Debt Markets and what should be your debt funds strategy in a rising interest rate scenario.

Such China Challenger Stocks are STILL Ignored and Undervalued (Profit Hunter)

Mar 2, 2021

Don't mistake defence stocks to be the only China challengers.

Beware the Ides of March (Fast Profits Daily)

Mar 1, 2021

The month of March is usually difficult for traders. This time it will be even more so. Find out why in this video.

UTI Nifty200 Momentum 30 Index Fund: Aims to Benefit from Momentum Investing Strategy (Outside View)

Mar 1, 2021

PersonalFN analyses the features of UTI Nifty200 Momentum 30 Index Fund and explains the potential this fund has to offer to its investors.

More Views on 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.

Make Rs 5,000 Per Day Trading the Market (Fast Profits Daily)

Feb 25, 2021

In this video, I'll show you how to get started on the path to daily trading profits.

I Believe the Investment of the Year Will Be...

Feb 19, 2021

In this episode, ace trader Brijesh Bhatia talks to us about the best investments of 2021, his profitable trading system, and much more.

The Hidden Tesla in My Great Indian Wealth Project (Profit Hunter)

Feb 23, 2021

An Indian company founded three decades ago in a garage caught my attention...


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


Mar 2, 2021 (Close)