Trend of Stock Market and Its Impact on Indian Economy

Abstract

The Indian markets have been plunging since the start of 2016; the S&P BSE Sensex has shed 10% since the New Year. The primary reasons for the current fall are not fundamentals of India but the global turmoil, which are not in hands of Indian Government.

Indian economy is the third largest economy in the world in terms of purchasing power. It is going to touch new heights in coming years. As predicted by Goldman Sachs, the Global Investment Bank, by 2035 India would be the third largest economy of the world just after US and China. It will grow to 60% of size of the US economy. This booming economy of today has to pass through many phases before it can achieve the current milestone of 9% GDP.

The Indian market is badly beaten by FII’s outflows. The global investors are concerned about the faster than expected slowdown in Chinese economy, the Fed rate hike and the multi-year low commodity prices. The investors fear that the current geopolitical situation will drag the global economy into another recession.