Global pressures build up

THE steep correction witnessed by the market has shattered the myth that the Indian market will largely remain unaffected by what happens to the global markets. Despite economic macro-fundamentals remaining solid and, in fact, benefitting from softening commodity prices, no market can remain decoupled from what happens in the world. The other theory many analysts have been putting forward is that the steep correction has mainly been caused by global factors such as the Fed rate hike, the massive slowdown in China coupled with devaluation of the yuan and struggling commodity exporting economies, but the fact remains that local factors are equal culprits. The market has run up way ahead of fundamentals and, at 18 times its trailing 12 months earnings post-correction, is still pricier than most of its emerging market (EM) peers as also many of the developed markets.

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About gfilesmagazine

gfiles is the country's first independent magazine written, designed and produced for India's civil services—the vast and formidable network of bureaucracies and public sector organisations that provides continuity and stability to this nation's governance.
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