Trade deals ease risks for Indian equities, but weak demand and stretched valuations raise questions over whether optimism -- especially in smallcaps -- can turn into a sustained bull run, points out Debashis Basu.
India has managed high government debt-to-GDP, a slowing domestic revenue engine, lower household savings and a more hostile geopolitical environment separately in the past. But together, they threaten to undo the growth narrative on which today's optimism rests, warns Debashis Basu.
State debt is rising because revenues are disappointingly weak. Ten states have debt ratios exceeding 30 per cent. In 2023-2024, states were borrowing simply to meet day-to-day expenses, points out Debashis Basu.
There are vexing questions around the disconnect between Nifty returns and portfolio returns, between economic growth and earnings growth, and finally, between earnings growth and market returns, points out Debashis Basu.
'The danger is that when the music stops, the fall will be sudden, faster, and deeper than anyone expects,' warns Debashis Basu.
GST 2.0 may cushion consumers against US tariffs, but like the 2019 corporate tax cut, it risks being another tactical fix rather than a structural growth strategy, expects Debashis Basu.
Any industrial policy is only as good as how it is applied and the other reforms that support it. This was as true 40 years ago as it is now, points out Debashis Basu.
Unless something changes, Mr Trump is a huge threat right now, which is perhaps not being recognised fully, cautions Debashis Basu.
'If weak indicators persist, there is a risk that India could slip into a prolonged slowdown similar to the one experienced between 2014 and 2019,' warns Debashis Basu.
If growth reverts to the pre-Covid level, a lot of people may have to temper their rosy optimism, points out Debashis Basu.
Feature for feature, bank FDs are indeed better than debt funds today, mainly thanks to Ms Sitharaman, notes Debashis Basu.
Trumponomics, poor growth, and high valuation certainly don't make a bullish recipe for Indian markets, warns Debashis Basu.
'Sebi had no problem with derivatives until trading exploded after Covid.' 'But now, having built a dangerous road, from which different entities, mainly governments, are extracting a heavy toll, Sebi is concerned that people are driving on it in much greater numbers,' explains Debashis Basu.
The climate for 'doing business' remains forbidding, taxtortion is still rife, corruption at state and district levels has increased, oil prices remain extortive with high taxation, and the continued red tape has kept the enterprise system as stifled as before, points out Debashis Basu.
There was no smooth surge in middle class prosperity for foreign businesses to tap into because of the Indian economy was mismanaged, argues Debashis Basu.
Economic growth, which we are taking for granted, slows for a completely different set of local or global factors and the Modi premium vanishes, observes Debashis Basu.
These are usually found among small and midcaps. It is not easy to find such stocks, especially after a strong bull market, discovers Debashis Basu.
Why are DIIs holding such a high stake in Zee, which is beset with alleged governance issues? Perhaps they think Zee is a deep-value stock, observes Debashis Basu.
Which entrepreneur would willingly part with her or his hard-earned money for grasping, self-serving politicians? asks Debashis Basu.
Byju's is set to go the way of Housing.com and Zilingo. It is only a matter of time. Indeed, the coup attempted by investors will ensure that, says Debashis Basu.
A piece of slightly negative news can cause a serious setback, warns Debashis Basu.
We have millions of newbie investors who are clueless about how to handle sudden and severe adverse market reactions, which arrive from time to time, observes Debashis Basu.
If you think that revenue officials are going berserk, acting on their own, while the government chants the mantra of 'ease of doing business', you would be wrong. These moves appear to have full official backing, points out Debashis Basu.
'I think some of us, like Mukesh Ambani, myself and those of us who head industrial units, ought to really focus on what we can really do to make the world a safer place, maybe 50 or 100 years from now.' 'For instance, how can we deal with climate change and global warming, right now?' 'The effects of it may not be felt now; in fact, we may pay a price for it today, but it will help the generations to follow.'
If they are made accountable, bad loan cases will shrink dramatically, recoveries will rise, and the NCLT process will be more manageable, asserts Debashis Basu.
While the corporate sector has benefited from massive capital expenditure, leading to sky-rocketing stock prices, investors would do well to keep an eye on the macroeconomic picture and government finances, not just corporate profits, for signs of trouble, alerts Debashis Basu.
After bumbling for years since 2014, the Modi government seems to believe that massive government expenditure will lead us to prosperity supported by 'seat-of-the-pants' decision-making, observes Debashis Basu.
While Jio MF will undoubtedly grow in size, it will have to cross multiple hurdles even to emerge as the market leader, observes Debashis Basu.
Very often, 'sentiment' drives prices well beyond what is warranted and it is hard to forecast market sentiment, explains Debashis Basu.
'Rhetoric and chest-thumping are running high on India's recent growth record.'
'But will the giant waves developing elsewhere allow us to sail smoothly into fair winds?' asks Debashis Basu.
We as customers have to be conscious and careful to sidestep numerous types of frauds made possible under a mindless shift to a digital ecosystem without customer-redress procedures, warns Debashis Basu.
After bumbling for years since 2014, the Modi government seems to believe that massive government expenditure will lead us to prosperity supported by 'seat-of-the-pants' decision-making, observes Debashis Basu.
Taxing the rich will fetch nothing; only votes, argues Debashis Basu.
Nobody is held accountable for lapses, no matter how badly it affects the person or business whose accounts are frozen. Nor is there compensation for losses. Most people get to know their accounts are blocked only when a cheque bounces, points out Debashis Basu.
The Adani stock price saga will pass into public memory as one of those matters that simply escaped being nailed down, perhaps because too many vested interests were involved, notes Debashis Basu.
The Adani story has only one angle -- how the stocks were rigged up to ridiculous heights, the Hindenburg report on gross overvaluation, followed by the vertical free fall of Adani stocks, points out Debashis Basu.
The 'sudden volatility' in Adani stocks is entirely due to a series of events that was extreme and unique, and played out in too short a period. Investors and regulators pretended that it wasn't so. But then, along came Hindenburg, which forced some eyes to open, points out Debashis Basu.
The most important positive of India's stealth bull market is earnings growth across different sectors, explains Debashis Basu.
Just because India has outperformed the US markets in a short recent period, it does not mean that this is based on fundamental reasons that are here to stay, points out Debashis Basu.
Damage from new shenanigans can be contained if regulators move quickly when something does not smell right, counsels Debashis Basu.
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