India: the promising emerging country

Many eyes are on India, after Narendra Modi was elected as new Prime Minister last year. His reformist agenda interested the investors’ community, as India is still a country with several barriers for an open market. However, only the effect of expectations about Modi’s reforms pushed the stock market, as BlackRock’s Investment Chief Russ Koesterich commented.

It is expected that the GDP in the fiscal year 2014/2015 (till March) has grown around 7.4%. However, there is a current slowdown related to the traditional country structure. Reforms are not easy in such a big country with strong social structures. But Modi has generated optimism to make business easier and attract foreign investment. He also plan strong investments in infrastructures to promote the economy. Oil prices have helped control the prices, traditionally rampant, and the Reserve Bank of India reduced in March the interest rate to 7.5%, with possible new cuts if fiscal policies are under control.

What about the stock exchange? Sensex Index in Bombay shows that there is currently a correction after the peaks in the first quarter of 2015. The former year registered a steady line upwards favoured by Modi’s reformist programme.

Global trend in India by T-Advisor

What are the winners and losers in Bombay Stock Exchange? Top performers are related to car industry (Bharat Forge and Ashok Leyland), pharma (Ranbaxy Labs and Lupin) and chemicals (United Phosphorus). These are the figures in T-Advisor:

Best performers in Bombay Stock Exchange

On the other hand, worst performers are related to infrastructure (Jaiprakash and GMR), tourism (Indian Hotels), education (Educomp Solutions) and industry (Jindal Steel and Power). These are the figures in T-Advisor:

Worst performers in Bombay Stock Exchange

India has still several handicaps, but with a Chinese economy suffering a slowdown, many investors pay attention to the Indian economy, as they perceive this country as the promising emerging amongst the famous BRICS group.

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