Inflation and Stock Markets

  • Post author:
  • Post category:Posts

When important government institutions announce critical decisions, one has to go beyond the obvious implications of those decisions. This is clearly evident in financial markets. When central bankers worldwide almost unanimously cut policy interest rates and infused liquidity in financial markets to revive economic growth, there was a critical outcome which prudent investors and observers had to bear in mind: Inflation. The resultant impact simply can’t be ignored. Increasing supply of liquidity and loose monetary policies globally ensured rapid resumption of asset prices and economic activity. But the increase in money supply also creates a real inflation challenge.

(more…)

Continue Reading Inflation and Stock Markets

Union Budget and Stock Markets

A key annual event that is keenly observed and followed across the socio-economic strata is the Union Budget. Normally, the Budget has a bit of everything which affects not only the rich but also the marginally rich, the middle-class, and the poor. It is an event that has the potential to change the way we deal with our expenses, ambitions, plans, and desires. It also contains path-breaking reforms that can change the course of the economy, sectors, and businesses. The Union Government, as part of this massive exercise, seeks feedback and holds series of discussions from various Industry bodies, trade associations, thought leaders, economists, experts from across sectors and reviews them as a part of the Budget preparatory exercise.

Going much beyond the stated purpose of articulating the “Statement of Accounts and Allocation of Funds”, the Budget attempts to incorporate various policy reforms and measures with the objective of achieving economic growth and progress, social welfare and upliftment.

Among other measures, changes in policies especially taxes have a distinct correlation with stock markets. Whilst some Investors build speculative positions based on their expectations from the Budget, others wait for the Budgetary announcements to happen and then take a more considered view on their investment decisions. Both are guided by the underlying relationship between the Budget and its impact on the economy and the stock market. Let us go back in history and try to get a deeper understanding of how this crucial aspect has indeed played out, in the past.

(more…)

Continue Reading Union Budget and Stock Markets

What does the recent broad-market rally in markets tell us?

A key characteristic of the rally in Indian stock markets since April 1, 2020 is its broad-based nature. Contrary to the polarization seen in CY2018 and CY2019 when a few high quality names kept the bellwether Nifty 50 up, the recent rally has witnessed broader participation of mid-and-small cap stocks. This broad nature of the rally has clearly provided opportunity to investors to make money. But this does not mean that everyone invested made handsome money.

(more…)

Continue Reading What does the recent broad-market rally in markets tell us?
The GDP vs Stock Market Conundrum
Alphaniketan is an Investors Education initiative from Alphaniti

The GDP vs Stock Market Conundrum

  • Post author:
  • Post category:Posts

The recent GDP growth number at (-) 24% for the period April to June 2020 has kindled a debate on the apparently complete disconnect between the broad economy and equity market performance during the period.
(more…)

Continue Reading The GDP vs Stock Market Conundrum
Distribution of Covid Vaccines – Challenges and Opportunities
Alphaniketan is an Investors Education initiative from Alphaniti

Distribution of Covid Vaccines – Challenges and Opportunities

As we move closer to the day COVID-19 vaccines will be allowed for mass usage, the optimism in the air is progressively increasing.

Stock Markets across the world are scaling new peaks with many key variables indicating sustained rebound in economic activities. However one needs to view the current market sentiment with measured perspective and a practical approach. While the general optimism around launch of vaccines is running high, the on-the-ground situation will be challenging for implementation of mass immunization programs especially in a developing country like India of our size and population.  

(more…)

Continue Reading Distribution of Covid Vaccines – Challenges and Opportunities

Spanish Flu Impact on the Stock Market in the USA and Response Measures by the Government

The Spanish flu, also known as the 1918 flu pandemic, was an unusually deadly influenza pandemic caused by the H1N1 influenza A virus. Lasting from February 1918 to April 1920, it infected 500 million people – about a third of the world’s population at the time – in four successive waves. The death toll is typically estimated to have been somewhere between 17 million and 50 million, and possibly as high as 100 million, making it one of the deadliest pandemics in human history.

(more…)

Continue Reading Spanish Flu Impact on the Stock Market in the USA and Response Measures by the Government

COVID and its Impact on the Economy

  • Post author:
  • Post category:Posts

We live in a closely connected and globalized world which is integrated through trade, currencies, stock markets, cultures, religion, language, science, medicine and technology. History has been replete with incidents which originated at one part of the world and then rapidly spread all over.

(more…)

Continue Reading COVID and its Impact on the Economy