One culprit behind the poor recent performance of emerging markets is growing bond market volatility and the knock-on effect that that may be having on so-called carry trades, under which investors borrow money cheaply in one currency and then invest it for what they hope will be higher returns elsewhere.
India's manufacturing expanded at a faster pace than China
Meanwhile, outlook for global emerging markets remained relatively weak in September.
Bank of America (BofA) Securities expects India to be the third-largest economy in the world by 2031. The economic rise could become a reality by 2028, but the Covid pandemic delayed the pace, BofA Securities economists Indranil Sen Gupta and Aastha Gudwani wrote in a report.
The report, however, said a sustained weakness in USD against the emerging market forex remains a key risk to this view.
Strong dollar will impact financial system in India.
While Airtel has hiked the limit to 100 per cent in principle, the company needs to address some issues on overseas investment limits in subsidiaries, before the changes come into effect. Until then, the cap on foreign ownership will remain at 49 per cent under the automatic route.
IMF Chief Economist Gita Gopinath also said the pickup in global growth for 2020 remains highly uncertain as it relies on improved growth outcomes for stressed economies like Argentina, Iran, and Turkey and for under-performing emerging and developing economies such as Brazil, India, and Mexico.
'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'
The broader Nifty closed at 11,993.05, falling by 233.60 points, or 1.91 per cent. On the Sensex chart, Bajaj Finance was the top loser, dropping 4.63 per cent, followed by SBI, IndusInd Bank, Maruti, HDFC, Hero MotoCorp, Axis Bank, ICICI Bank and RIL
From the 30-share Sensex pack, 26 scrips closed with gains led by Tata Motors that zoomed 16.63 per cent after the company reported narrowing of losses in the September quarter.
'There will be massive differences in sectors and stocks over the next few years.'
He said cheap valuations, improving sentiment and the ongoing reform momentum coupled with increased transparency due to the internet are driving investors to the Dalal Street.
India is more insulated to Fed-related volatility than other emerging markets due to its better economic fundamentals
Being part of category-I implies lower compliance burden, simplified know-your-customer norms and documentation requirements, and fewer investment restrictions.
Besides the pandemic that resulted in higher interest rates, the default by Future Retail has dealt a blow to investor sentiment.
'The Indian economy is in slowdown and growth may stay slow,' notes Devangshu Datta.
Equity investors grew richer by Rs 32.49 lakh crore in 2020 on the back of smart returns in the stock market which had a roller-coaster ride during the year hit by the coronavirus pandemic. The COVID-19 outbreak ravaged lives and livelihoods on a global scale, shuttering businesses and jolting world equities. But amid all the gloom, Indian stock indices gave hope of returning to winning ways towards the latter part of the year.
Moody's said it expects exposure to low oil prices to shave off 0.8 per cent from real GDP growth on average across oil exporting countries in 2016.
Overseas investors have pumped in $6.3 billion in Indian equity markets in three months ended September on attractive valuations, opening-up of the economy and resumption in business activities, says a Morningstar report. This comes following a net inflow of $3.9 billion in June quarter and a net withdrawal of $6.38 billion in March quarter. Apart from inflow, the value of FPI investments in Indian equities swelled further during the quarter under review largely on the back of robust net inflows, coupled with a strong performance of the Indian equity markets.
The ballooning of crude prices has significantly increased the country's oil import bill and it can also lead to a worsening of the current account deficit and fiscal deficit for the domestic economy.
If you are planning for a long-term goal like your child's education in a foreign university, invest about 20% of your portfolio in foreign assets that can provide a hedge against the rupee's depreciation.
'The outcome of next year's assembly elections, macroeconomic indicators/corporate earnings growth and global events could keep the markets choppy.'
India gains at the expense of Russia and Brazil
The research firm expects global smartphone shipments to surpass a billion units this calendar year and 1.7 billion by 2017 aided by steady decline in average selling prices and emerging markets, including Asia Pacific, Latin America, and Middle East and Africa contributing in volumes.
The launch of premium devices from OnePlus and Samsung in the second half of Apple's reporting period added to Apple's woes.
There is positive correlation between crude oil prices and Indian equities and investors can expect more upside after the recent rally in Brent crude price.
'In end-December 2015, Nifty would end at 8,600 and Sensex at 28,000.'
For many, Apple's highly anticipated launch on Tuesday was to be the answer to consumers in India, China and other emerging markets who craved some iOS magic in their life but could not afford its previous range.
'If one believes that the Indian stock market will go up 70 per cent every year for the next 10 years, I wish you good luck!'
According to experts, work from home, volatility in stock markets worldwide, and redemption pressures compelled investors to defer new investment plans.
The world economy is going through a tough phase.
Reserve Bank Governor Raghuram Rajan expressed confidence in India's growth and said the country is on target to meet Jan inflation target of below 6%.
However, it still lags far behind the US, which leads with a market-capitalisation of $23.9 trillion through August 2014.
The task force will look at emerging markets, technology, regulatory and monetary policies, loss of trust in financial services, and financial inclusion.
We expect the Indian equity market to continue attracting interest from local as well as foreign investors. This is because India's economy is expected to continue to record sustained economic growth.
India retains the tag of the fastest growing country among the world's major emerging economies
The broader NSE Nifty too reclaimed the key 11,500-mark. It touched a high of 11,562.25, before finally settling at 11,536.90, showing a gain of 59.95 points, or 0.52 per cent.
Even though emerging markets generally do not have the level of market efficiency and strict standards, they are most sought after by investors.
The BSE Midcap and the Small-cap Index have run up 25.3 per cent and 31.3 per cent respectively over the past year. Valuations are no longer cheap, notes Sanjay Kumar Singh.
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