Stock market
Last September, when the Indian stock market bounced, many experts predicted that the Nifty could reach 28,000 points in 50 months. However, the opposite happened. The Nifty 50 has now come down to about 13 percent from its record high level 26,277, which arrived on 27 September. Market experts are assuming that some recovery is expected due to the market entering the oversold zone, but a new bull run is unlikely to start soon. The path ahead of the Indian stock market seems challenging. Let’s know why?
1. trump tariff uncertainty
US President Donald Trump has shocked the global markets with his tariff steps. Giving a new shock to the market notion, he has announced a mutual tariff. This means that the US will impose equal level tariffs on goods that exporters are more on the same products. Experts say that their mutual tariffs can create significant obstacles to global businesses and even cause extensive trade war with colleagues and opponents. Trump’s tariff policies are expected to have restlessness in investors and recession in markets.
2. Uncertainty in macroeconomic
Global uncertainty and unexpected monsoon have blurred the approach to the Indian economy. Whereas signs of weakness in the hope of being one of the fastest growing economies in the country are becoming clear. Due to weak manufacturing sector and slow corporate investment, India’s economy is expected to grow by 6.4 percent in the current financial year.
3. Selling of foreign investors
Foreign institutional investors (FIIs) have sold Indian shares worth Rs 2.94 lakh crore since October last year, while American bond yield has increased, dollar strengthening and increased Indian market evaluation. This year, the outflow of foreign capital has also increased due to low expectations in interest rates by the US Federal Reserve. If the outflow of FPI continues, the Indian stock market may remain under pressure.
4. Nervousness among small investors
Small investors are nervous due to the decline in the market. Retail investors have been much lower than SMID (small and mid-cap) indices. Since retail investors are directly and indirectly investing in these areas through mutual funds, it will be interesting to see how they react to their investment performance in the coming months. Domestic investors’ support has been an important factor in preventing the Indian market from going into recession. However, if they get nervous and sell, it may cause a major decline in the stock market.
5. Weakness of rupee
The weakness of domestic currency remains a major concern for investors, as it has contributed to foreign capital. If the rupee does not improve then it will not be good for the Indian market. Foreign investors will continue selling which will take the market down.
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