All news channels are shouting to let you know that how the Indian economy is losing the pace and getting weaker and weaker every day. Unfortunately falling rupee unintentionally supported them but nobody will show you the actual picture.
News can be wrong but not the data.
Just Google ‘what key factors that weighed on the market down?’
Every website will tell you five reasons:
High Crude Price | FII outflow | Rupee at lifetime low | Bond yield is at 8.19% | Current Account Deficit
Let’s compare 2013 market crash data to 2018 Sell off:
But still Sensex (from 2013 to 2018).
They are mentioning that CAD ( Current Account Deficit) widened to the most in five years and this may be the panic button. | Compare 2013 crash to 2018 selloff. CAD recovered so quickly after breaching the crucial level of 2.5% of GDP.
India’s fiscal deficit has been decreased very sharply which is actually a positive sign.
“Just to be fair, the Indian authorities have brought down the fiscal deficit.” - Raghuram Rajan
2) FII outflows:
3) Crude oil price is now at $78 but in 2013? It was $111.
4. The rupee is at lifetime low, but have you observed the movement in last 5 years. Rupee went to 68 Rs/$ from 55 Rs./$ in just a few months and again came back to 56 levels.
5. 10-year bond yield is now at 8.15% but in 2013? it was 9.10%
Footnotes: Trade war is the only concern that may affect the economy which is actually an external factor.
Never ever go with rumors because people will create panic, we will try to sell the stocks and suddenly you will hear the news that FIIs heavily invested in the stock market. By the time you will buy the stocks again, it will become too late and this process will continue.
The Indian equity market continue to be the best-performing among emerging economies for 2018 despite the rupee weakening to 70 against the US dollar. The benchmark index, S&P BSE Sensex rallied since January.
In comparison, the returns for most emerging markets (EMs) are in the negative territory. Even in terms of foreign portfolio investor (FPI) flows into the equity markets, India has fared better than other EMs.
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