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New Dawn Across the Panic


Compared to India’s peer such as China, Russia and Brazil which have rallied significantly this year, the India’s stock market valuation is more reasonable and India’s prospects are weighing more optimistic. The investors should remain invested with the equities and one should not be impressed by the withdrawals done by the foreigners which are driven by the fact that few fund managers who were underweight on the peer markets.

They are rebalancing their portfolios due to strong performances in these markets and not because of any expression of mega disappointment due to India’s growth and reform story and as such the global environment is such that the fund managers become panic by the minor tremors of technical adjustments. India has a very encouraging outlook amongst all the emerging markets and with the flood of participation by the government bodies and the local investors will increase the participation further only to trigger the additional capital flows into the Indian markets.

The difference in the valuations amongst the peer has converged significantly since last quarter and now no country is having any specific advantage. The foreign investor will remain focused the basics like the growth and the reforms and as such India still looks like a shining star amongst the emerging markets.

The reforms which were like low hanging fruits were delivered quickly where as the bigger ticket reforms will definitely take its own time as the country of this huge geographical, political, social and cultural diversity and hence the reforms will take its own gradual pace. As far as the prices of the crude is concerned they are bound to trade around $60-70 a barrel for the next 18 months and the US dollar is expected to escalate against the all major currencies and on the other hand the rupee will be at its modest against the dollar moving up.

At the moment the earnings growth may be looking to wilt is also going to make a rebound so also the case with the corporate earnings, if we take a look on the broader aspects the market valuations are respectably healthy and is no longer a concern and it is the right time to take position in the Indian equities. The Indian success story will take the couple of concerns like the hike in interest rates by the US Federal Reserve, the monsoon whatsoever and the outcome of the Greece default in its stride.