Indian economy is in very bad shape now. Government is totally failed to revive our economy. GDP growth rate is hovering around 5%-6% which is much lower than we saw during 2004-2008 period. Major concern is Rupee depreciation and very high current account deficit. Rupee is at its life time low and there’s no signal to bounce back immediately. RBI has already taken several steps so that rupee can bounce back. But results are limited. Rather it adversely affect banking industry. Maximum PSU banks are trading at their 52-week low-level. Private banks are also hammered heavily. Rupee depreciation will also make Petrol and diesel costlier.So, be ready to pay more for your household expenses. FIIs are also pulling money from Indian Market.Many retail investors are planning to sell their stocks from their long term portfolio. So called defensive sector FMCG is also participated in this show. FMCG major ITC, HUL are also falling rapidly during the last few weeks.Only gainers are IT and Pharma because they are major beneficiary from rupee depreciation.(due to significant export income)
Retail participation in stock market is also at its lowest level.Many investors are planning to sell their stocks from their long term portfolio and park their fund in Fixed deposit. But before leaving from stock market right now ask yourself the following questions –
- Is it possible that FIIs will continue to pull their money from Indian market for the next 2-3 years?
- Is it possible that stock market will continue its downward journey for the next 2-3 years?
- Is it possible that Indian economy will deteriorate continuously from this level for the next few years?
Answers of all those questions is a big “NO”.