The
past 2 weeks have been an exciting time from the economic perspective. Markets
have swayed like the sine curve as evident by the VIX rising to as high as 32%.
The same has happened with USD-INR with currency fluctuating to as high as 68
and now trading at around 64. The major factors (again with the reasonable
margin of doubt and not being opaque and falling for the causation myopia
(reference: NNT)) have been the continued effects of FED QE tapering, U.S
stance on Syria, dismal august IIP and GDP figures. The bad news was countered
by the confident, no nonsense stance on the economy and a slew of plans for
reforms, primarily in the financial sector by the new Governor Mr Raghuram
Rajan (Also my alum). He seems to be the toast of town with a plethora of
articles and op eds being written. Yesterday’s rally of 750 odd points on the
SENSEX accentuated by higher exports , lower imports , increase in auto sales
and the likes seems to be a god send. But still fundamental weakness remains in
the economy and it would be prudent to not fall for this short term exuberance.
Going forward FED’s stance on 19th September on the future course of
QE tapering should be a market mover as will be RBI policy review on 20th Sept..
There
have been a slew of great articles , some of them are mentioned below.
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/letter-from-a-banker-thank-you-governor-but-what-do-we-do-with-our-police-politicians/articleshow/22473493.cms
The below article mentions some of the figures showcasing
the fundamental weakness but excludes important factors like twin deficits ,
forex outflows etc.
It was also disheartening to read the below article. But for
all it states , it is mostly true and has been so for a long time
http://www.thehindubusinessline.com/opinion/indias-never-had-it-so-bad/article5093685.ece
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