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Stocks may witness global, domestic headwinds in 2018: ASSOCHAM study

 

Sunday, January 14, 2018


New Delhi, January 13, 2018: The year 2017 may have gone as the golden period for Indian stock market, in sync with the major economies of the world, global headwinds like tightening of monetary stance by major central  banks and increasing crude oil prices , coupled with domestic concerns like firming inflation could halt the underlying bull run in 2018 and bring in lot more volatility going forward, an ASSOCHAM Paper has indicated.
 
“Correction in the global indices due to any or all of the factors such as- the central banks tightening globally, balance-sheet reduction of the  US Fed, pressure on  crude oil prices and  geo-political risks , among other factors, may  impact overbought position in  India , China and other Emerging Markets in 2018”, the paper noted.
 
So, the current year may be contrary to 2017.   India’s change in yield in US dollar terms was at 36.8% comparative to China that registered at 51.1%. A combination of primary market growth and overall macro economic situation made India and China attractive.
 
The year 2017 had been a golden year for IPOs with as many as 153 initial public offers (IPOs) hitting the Indian stock market, raising around USD 11.6 billion. A large number of the issues were over-subscribed reflecting quality of issues and the appetite for public issues by the investors.
 
The  AUM (Asset Under Management) may remain a preferred choice for investors   in  2018 as well, but with the bond markets indicating inflationary pressures and their upward  impact on the interest rates, the dice may favour debt market and the bank deposits again.
 
“In the backdrop of upcoming union budget in the beginning of February, followed by assembly elections in key states, the markets may witness greater amount of volatility,” said ASSOCHAM Secretary General Mr D S Rawat.
 
Of course, the last year had seen a dream run for the market, led by the domestic institutional investors . During Jan-Dec 2017, DII’s made the record by net purchase of Rs 90738.31 Crores, whereas FII’s registered net withdrawal of Rs  44108 Crores from India during this period.
 
During the year 2017, the stocks of certain industries such as IT and pharmaceuticals which are based on export businesses remained under pressure due to continuing disappointment by the earnings caused by decline of USD to INR throughout the year. 
 
Which sectors would outplay others is still not clear. 
 
 
About ASSOCHAM:

ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org
 
For further details, please contact:
 
Manju Negi
AVDHESH SHARMA    
ASSOCHAM
ASSOCHAM    
011-46550509; +919810910911
011-46550508; +918527639419

 

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