INDIAN EQUITY MARKET ||| THE BULL IS ON A RUN.

 

INDIAN EQUITY MARKET

THE BULL IS ON A RUN,

EARN,TILL IT LASTS.

SARASIJ MAJUMDER

 

Whenever the Index of Indian  Share Market crosses a peak, there are some expert comments reach Newspapers, Social Media,  and You Tubes about immediate  large Correction, Fall- and  Bagera, Bagera….||

DOOMSDAY forecasters available  are a dime a dozen.

If you ask any of  these people to show their ‘Investment Record’, in a safe and reliable manner—you will find that they have almost nothing to show.

If they had the capability to  make money  from the share market—they wouldn’t have been in business of News Reporting, Social Media, and making You Tubes to get a ‘LIKE!’, and to lead a life out of that earning!

I tell you—if you are a longtime investor—don’t fear. Continue to Invest, and Remain Invested. THIS NOT THE TIME TO QUIT!

I will share below some reasons why our Share Market is now probably ‘One of the Steadiest Equity Investment Tool’ in the world, and will remain so—unless PAPPU GROUP get hold of the Government. But that chance is Far, and Remote!

Now—health of Equity Market of a country, mostly depends upon the overall Macro Economical condition of that State. There are several key  ( 11) variables—but I will discuss the seven (7) most prominent ones. However—in the opinion of somebody else, some other factor(s) may be more important.  I will not enter into argument.

I am eating my Cakes, Puddings, and Rasgulla!

Comparatively, making money in share markets of  Japan, Singapore or USA are easier than in INDIA. However—our market for the last decade, has become quite stable, and reliable, compare to earlier days. SEBI did a fairly good job. DEMAT, DIGITISATION—all helped.

A. GLOBAL MANUFACTURING OUTPUT INDEX:  (We were weak here .)

Top Manufacturing Countries:-- Presently we are 5^th in Global Ranking, at 2.9% (Ref. https://www.safeguardglobal.com/),  behind China, USA,  Japan, and somewhat behind Germany. If we can improve upon—our position will be stronger. ISRO, Agricultural products,  Garments, Leather and export of Défense Equipment—these are where we must concentrate more. Why we are not importing HIDES from Bangladesh? It will be cheap!

B. BANKING SYSTEM:

Our Banking system is possibly now one of the  Robust in the world with very less NPA. United States’ Non Performing Loans Ratio stood at 1.4 % in Jun 2024, compared with the ratio of 1.4 % in the previous quarter . The Reserve Bank of India reported that Indian banks' gross NPA ratio reached a multi-year low of 2.8%, with net NPA at 0.6% by March 24.-- Jun 24.(https://pib.gov.in/PressReleasePage.aspx?PRID=2034950).

C. Foreign Investment Capital In Equity Market Of India:-

1.3 lakh crore (US$ 15.60 billion) in 4 years until March, 24--aided by SEBI's regulatory reforms enhancing retail participation and investment opportunities. In June 2024, foreign investors turned net buyers by infusing Rs. 26,565 crore (US$ 3.18 billion) into the Indian markets. (https://www.ibef.org/economy/foreign-institutional-investors#:~:text=1.3%20lakh%20crore%20(US%24%2015.60,billion)%20into%20the%20Indian%20markets.)

D Doller Reserve:-

Even a Financial KID knows about the present position of INDIA. As of September 13, 2024, India's foreign exchange reserves (forex reserves) were at a record high of $689.5 billion. This was due to a number of factors, including:

• A strong influx of foreign exchange into the Indian economy.
• The inclusion of Indian assets in JPMorgan's emerging market debt index.
• The rebound of the yen and yuan.

(https://www.statista.com/statistics/802050/india-value-of-foreign-exchange-reserves/#:~:text=In%20fiscal%20year%202023%2C%20the,at%20around%20578%20billion%20dollars.)

 

E. INFLATION:-

As of August 2024, the inflation rate in India was 3.65%. This is within the Reserve Bank of India's (RBI) tolerance range of 2–6%.

Here's some more information about inflation in India: 

• In July 2024, the year-on-year inflation rate was 3.54%, the lowest in 59 months. 
• The inflation rate for rural areas was 4.10% and for urban areas it was 2.98%. 
• Food inflation, which accounts for about half of the overall CPI basket, was 5.66% in August. 
• A weak rupee and monsoon risks may keep inflation pressures high. 

Overall—present GOI is managing inflation pretty well.

(https://www.macrotrends.net/global-metrics/countries/ind/india/inflation-rate-cpi#:~:text=India%20inflation%20rate%20for%202022,a%200.21%25%20decline%20from%202018.)

F.  FISCAL DEFICIT TO GDP:

India's fiscal deficit for 2023-24 was 5.6% of the gross domestic product (GDP), according to the Controller General of Accounts (CGA). This is down from the 6.4% fiscal deficit in 2022-23. The revenue deficit for 2023-24 was 2.6% of GDP. 

The fiscal deficit is the difference between the government's spending and revenue earned. The government's target for the fiscal deficit in 2023-24 was initially 5.9% of GDP, but was later revised to 5.8%. The fiscal deficit was able to be reduced due to strong tax collections. 

It used to be ++8% in UPA regime. Refer link below. (https://www.indiabudget.gov.in/budget_archive/es2004-05/chapt2005/chap11.htm#:~:text=The%20consolidated%20fiscal%20deficit%20of,of%20GDP%20in%202004%2D05).

G.DEBT TO GDP RATIO:-

A country's debt-to-GDP ratio is the percentage of its gross domestic product (GDP) that is owed in government debt. It's a measure of a country's ability to repay its debt. A low debt-to-GDP ratio means that a country's economy can produce enough goods and services to pay back its debts without taking on more debt.

In 2023, the United States' government debt to GDP ratio was 122.30%.

India's debt to GDP ratio in 2023 is estimated to be between 81.59% and 83.8%, depending on the source data.

India's external debt to GDP ratio was 18.7% at the end of December 2023, down from 18.8% at the end of September 2023. India's external debt increased to USD 648.2 billion by the end of December 2023, up from USD 637.3 billion at the end of September 2023. 

The central government's long-term objective is to reduce the debt to GDP ratio. One plan is to reduce the debt to GDP by about 1 percentage point every year until it reaches 50%.

(https://tradingeconomics.com/india/government-debt-to-gdp#:~:text=India%20recorded%20a%20Government%20Debt,percent%20of%20GDP%20in%201980.)

 WHAT EMERGE:---

If a competent  economist  considers all above—he will conclude that India is on a very good ‘Macro-Economic’ foundation, at present. Which means—‘ Fundamentals of Share Market’ is very strong.

INVEST HAPPILY,  BUT CAREFULLY. |||  JAY SIDDHIDATA GANESHAM!

NOTE:- The BLOGGER has experience of over 50 years of investment in equity market. He built a ‘FORTUNE’. And in this present stage of Market—get rid of your “LAGGARDS”,  if you have any.

All reliable references are ‘hyperlinked’ at the end of each paragraph.

Image:-- Google.