Goodwill Investor Education Eagle’s Eyes – Stock Market Review. Indian Economic survey and its impact on Bourses

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Where are we  now in Economic front?  A survey & review-The possible pathway for Bourses.

Indian Economy is passing through a bad phase in the recent past and the woes are manifold. Even prior to the impact of Covid ’19, the Indian economy was not at good straits. The GDP was sliding, fiscal deficit was alarming, unemployment was soaring, Revenue collections were not as much as expected and all these got multiplied during the pandemic period. The rating agencies and World bodies like WB, IMF, ADB etc.,are painting a bleak picture.

How hard and long will India’s road to recovery be? A survey finds answers.
Did India really need such draconian lockdowns, especially at a time when the economy was already having a hard time? While a debate over this risk-return tradeoff continues to divide people, a majority (over a third) of survey respondents said Modi govt had no other options.
A few days after the June GDP numbers made clear the extent of Covid’s economic devastation, ET Online ran a survey to find out how some of India’s best-informed readers of business news viewed the current state of affairs. Over four days, the survey drew more than 16,000 responses.
According to well over a third (36.5%) of the survey participants, the Indian economy has not yet seen the full extent of virus decimation. An almost equal number, however, are of the opinion that the worst is over.
It is fear and lockdowns that are hurting the economy more than any other factor, said a whopping 45.1% of respondents. This is a significant departure from a similar survey carried out a little while ago which saw respondents pin the most blame on Covid-induced supply disruptions and the broken labour market.
The case for drastic lockdowns
Did India really need the sweeping closure of all businesses for months, especially at a time when the economy was already having a hard time? While a debate over this risk-return tradeoff continues to divide people, more than a third of survey respondents said Modi govt had no other options but impose lockdowns. Those who thought Modi’s lockdowns hurt more than they helped, were offset by an equal number of respondents (each group at around 28  %)who said these drastic measures were necessary regardless of the consequences.

To give the ravaged economy a fighting chance, economists have been pushing for either a Stimulus 2.0, or a reopening with no conditions attached, or direct doles to weaker sections. In this survey though, most participants (44.5%) batted for a sentiment boost to the middle class, the mainstay of India’s consumption-dependent growth story.
While our survey questions hadn’t explicitly marked out the likely nature of such a boost, the fact that there is a crying need for the govt to give middle India some tax breather was not lost on anyone.

The lack of backing for money transfer to the weaker sections came as a bit of an eye-opener. Many frontline economists and policymakers see this as one of the best ways to jumpstart rural India, which they say will eventually trigger a positive cascade effect for all of the country. But in our survey, just 14.5% of the participants saw it as a significant factor.
As many as 45.9% participants were all praise for the government for “doing all it can”. The detractors of the govt — those who felt that a plan looked missing — came a distant second at just under 25%. Regarding a question related to the likelihood and speed of an economic recovery, two distinct patterns were observed — as many as 34.5% of the respondents said they felt that the worst was already over and that better days were ahead, while a slightly larger chunk (39.6%0 said that a recovery would be long and hard.

So in view of the findings  as above it looks that the road for recovery is not that rosy and easy to happen in the near future, excepting the market movements will be a few hundred points up and immediate  sliding down the same no. of points due to profit booking by the hurt investors, the market movements do not promise to be that big to attract huge investments.

So investors may wait for more clarity of the direction to emerge in bourses.. But the Traders will benefit in a small way on daily basis. Small retail investors may prefer the MF-SIP mode to park their funds for a long term gain taking advantage of the low levels of some of the stocks.

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