It’s hard to be optimistic about India right now. Asia’s third-largest economy is growing at the slowest pace in a decade, the trade gap is widening, the rupee is plunging and the government’s cost of borrowing is soaring as confidence evaporates and investors flee.
NEW DELHI: The S&P BSE Sensex has plunged over 2 per cent in the month of April alone, and is down over 2600 points from its record high of 30,024.74 hit in the month of March 2015. After rallying about 30 per cent in the calendar year 2014, benchmark indices have erased gains both in the rupee as well as dollar terms, signaling a cautious stance of investors. The pace of buying of foreign investors, who have remained the back bone of India's equity markets, is slowing. There has been a substantial foreign institutional investor (FII) selling through April.
MUMBAI: The road to 30,000 may be paved with a few potholes and the odd treacherous hairpin bend but the milestone should be achieved by end-December. Some even suggest overshooting that distance — to 32,500 points and beyond on the BSE Sensex by then. But in the immediate term, there could be some pain, despite the soothing noises coming from the finance ministry on minimum alternative tax (MAT) demands. That's among the factors, apart from global and domestic developments such as poor corporate earnings, said to have led to the recent slump in the markets and the rupee.
This guest post was contributed by Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics. He notes two surprises in the outcome of India’s recently concluded election and suggests that India offers an alternative model of development for much of the world.
NEW DELHI: Nobody would have thought that the rally, which started last year after the NDA government took charge on 26 May, 2014, could come under threat. But the reality is that we have erased gains made in the calendar year 2015. However, analysts are still not giving hope and are positive about the Indian markets on a medium-to-long term basis, but they expect some bit of more downside in the short term.
NEW DELHI: Xiaomi, the world's fifth-largest smartphone maker, wants to become an "Indian company" as it looks to invest in a startup, set up an R&D centre, begin local manufacturing and emerge India's No 1 handset player by 2020. "The most important market for us in 2015 is India. We want to become an Indian company. So, we want to build an R&D team, manufacture phones, set up data centre in India and invest in ecosystem companies in India," Lei Jun, founder and CEO of Xiaomi, told ET. "We have a designated team that works on this project (local manufacturing).
Sunedison Inc (NYSE:SUNE) and Adani Group announced on Sunday to build India’s largest solar power panel factory. The plant is expected to be constructed in the State of Gujarat and is expected to cost around $4 billion. Construction of the factory is estimated to finish by 2018. Following the news, Sunedison stock is up 0.88% to $19.59, as of 12:24PM EST.
The biggest story in India these days continues to be the May 2014 elections and what they could mean for India's economy which is growing at its slowest pace in a decade. Naturally analysts have been weighing in on the elections.
NEW DELHI: HSBC has slashed India ratings to underweight from overweight earlier on concerns over slowing earnings growth, and said that the investment bank would only re-enter the markets if they fall by another 10% from the current levels. Indian equities rallied and with lack of momentum in other markets, both global and regional mutual funds built historically high overweight positions in this market by the end of 2014. So far, 2015 is shaping up differently to what many had expected at the start of the year.