He is known for numerous erudite posts and comments related to the trading world of stocks, commodities, forex and various derivatives. Syam K.P. is the chief analyst of one of the world’s leading investment companies, Gulf Brokers Ltd. This time, we were interested, however, in how India, Syam’s country of origin, is doing, not only in terms of capital markets, but also as a rapidly developing economy.
How is India currently doing in terms of GDP, inflation, and unemployment?
When we talk about the GDP growth in India, the Indian economy was very strong in the last 2 quarters compared to other economies around the world. India’s GDP grew at 13.5% during the April to June 2022 quarter. Coming to inflation and unemployment, inflation remains above the Reserve Bank of India’s tolerance level of 6%. The September CPI data showed the inflation rate rose to 7.41%. Meanwhile, the unemployment rate increased to 7.8% in October after the rate has fallen significantly in September.
What is the influence of the crises related to the war in Ukraine and, still, some lockdowns due to covid?
Like any other country, the Ukraine war has impacted the Indian economy as well. As we already know,India is the world’s third-biggest purchaser of oil after US and China. India has been witnessing a sharp rise in the inflation rate since the start of the Russia-Ukraine war due to a spike in crude oil prices in the international market. But the impact of the crisis in India was less compared to other developed nations.
India is to become the most populated country in the world. Does it have the potential to take over China in being the supplier of most manufacturing in the world?
China has long been the most populous country, but that isn’t expected to last long, with India projected to be the world’s most populous country in soon. Yes, there are chances India can beat China and become the next manufacturing hub in sectors like electronics and automobiles, but it will not be as simple as it looks. Recently, Apple revealed that the iPhone maker is expected to shift up to 25% of its iPhone production to India by 2025 to reduce its reliance on China-based operations.
“INDIAN STOCKS HELD UP INCREDIBLY WELL DESPITE WEAK GLOBAL CUES.”
Recently, the Indian rupee hit a fresh record low against the US dollar. Why is the U.S. dollar so strong against the INR, and will the INR regain momentum?
Yes, we witnessed the Indian rupee depreciating to an all-time low against the US dollar in October due to steady dollar appreciation and aggressive rate hikes by the US Federal Reserve. In the last two weeks, the Indian Rupee attempted to regain ground against the dollar after the pair hit a fresh lifetime low of 83.29, but it is far too early, however, to suggest the INR dominant downtrend is over.
As we are heading towards the final months of this financial year, do you think It is now a good time to invest in Indian stock markets?
The markets are volatile and uncertain, especially this year economic factors like the Fed’s tightening of monetary policy, inflation, and a potential recession are likely to have just as big an impact on the stock market. While Indian stocks held up incredibly well despite weak global cues as the earnings growth is strong among Indian companies. Hence, if you are planning to invest in Indian companies, make sure to check the company’s sustainability. For further safer side, investors must continue to invest in fundamentally strong stocks and diversify your investment portfolio.
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