The Fed announcement has definitely come as a relief for all the investors. Today, Nifty closed above 5200, which is about 304 points up. Interest rate cuts in the United States makes emerging markets more attractive for Foreign investors. In the near term, it may try and address the crisis situation but it does not help the longer cause of inflation worries. Going ahead, we can see the rupee getting stronger against the dollar which is not very good for sectors which thrive on exports. The IT industry has already seen tough times and going ahead things aren’t going to get any better.
But is the Indian economy really dependent on the US? One may really want to see the positive side of the story, which can be determined by the internal demand within the country. India as a nation is still growing in sectors like infrastructure, power, automation, agriculture, technology, telecom and we are far-away from other matured economies.Going ahead, these sectors definitely look attractive.
Another important factor an investor needs to be aware while investing into a stock is the Shareholding Pattern. In times of crisis, it would be a good strategy to invest in promoter compaines.
As I write this post, US markets still seem to be reeling under pressure which is not very good news.
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