Indian market hits the bottom

The stock market in India has reached a rock bottom level and looks ripe for investment, according to reports by financial analysts this week.

The Indian market hit a cheaper level than at any time in four-year period this July, and investors are taking a close look at the Asian superpower’s economy at the present time.

Inflation in India, coupled with fluctuating interest rates, has had an impact on the economic growth rate of the country, but by less than has been expected in relation to the downturn in the market. With estimated of growth in GDP for this year originally at between nine and ten percent, these have been revised to between seven and eight per4cent in the face of the current downturn in market state.
    

Growth level slows but steady

The slowdown in the economy, wile significant, is offset by the level of growth being much higher than at previous points in the history of the Indian economy. Whereas export growth has been known to fall dramatically in previous times of trouble – notably in the late 1990’s and early this century – the economy in India is far better established these days, and a worry must be not one of weakening growth, but one of an excess of such as the market stands.  

The Reserve Bank of India has implemented an interest rate rise of nine percent, after reserve requirements were raised in the face of rising inflation, which peaked at 12 percent in July, and this is a problem that needs to be addressed by the Reserve Bank.

As things stand it is predicted that the economy will slow down allowing inflation to drop to a manageable level, with the International Monetary Fund predicting an eight percent growth in Indian economy this year.
    

Attractive for investors

Current stock values in the Indian Market are this very attractive to would be investors, and any stability in economic growth will result in potentially better earnings growth with a greater attraction still to those wanting to invest.

Higher inflation is set to lead to a fall in market values, although it must be said that the current response of the Reserve Bank of India is unlikely to result in the sort of quick return market that many are looking for.

Rather, a continued but slightly lessened economic growth is likely to provide a buoyant and versatile market for investors looking to get into the growing Asian market.