With 55 per cent India's GDP comprising Services, it is apparent not much is happening on the manufacturing front. A core sector of industries does not exist which can provide and generate employment for the semi literate and illiterate of India. This lopsided growth structure is in sharp contrast to China, where 50 per cent of GDP comes from manufacturing. Relying upon ficklish investors to fund the Current Account Deficit makes India look more like a Banana Republic-unable to feed and employ it's own workforce.
Macroeconomic fundamentals in India are not quite as strong as they were a few years ago. Real GDP growth rates in 2006 and 2007 routinely exceeded 9 percent. Today, the growth rate has slipped below 8 percent. CPI inflation was running around 5 percent–6 percent during 2006–2007, but it is nearly 10 percent at present.
Although most analysts would not get agitated about a current account deficit equivalent to 3 percent of GDP, the present level of the deficit makes the country a bit more susceptible to the whims of foreign investors than it did a few years ago.
An economic or financial crisis in India does not appear to be imminent, at least not in the foreseeable future. However, the marginal deterioration in the country's economic fundamentals has not gone unnoticed by investors. The Indian stock market has underperformed most other equity markets thus far in 2011, and the Indian rupee has depreciated on a trade-weighted basis this year.
The country's central bank has raised its main policy rate by 250 bps over the past year due to the rise in inflationary pressures. Until inflation unambiguously begins to move lower, which will then stay the central bank's hand, investors may remain a bit nervous about near-term economic prospects in India.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
--
For Anything related with Stock market be Online at
http://www.niftyviews.com/
Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234
FOR TRIAL STOCK/NIFTY/OPTION CALLS
You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group.
To post to this group, send an email to STOCKRESEARCHER@googlegroups.com
To unsubscribe email
Stockresearcher-unsubscribe@googlegroups.com
for more info visit
http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB
.
This is Not a Spam Mail.
Disclaimer :-
"The opinions expressed by the members on this board are based on
their individual experience and perceptions and to share information
with other members with the best of intentions to help fellow members
in investment decisions as equity investment is a risky venture."
Posts
0 comments:
Post a Comment