Dramatic shift

the combined current accounts of oil producers may go from a surplus of US$407 bn in CY14 to a deficit of $106 bn if US$45/bbl sustains.

This is from a recent ‘India Market Strategy’ report of Credit Suisse (‘Commodities  Currencies  Global Growth’ dated 31st August 2015) by Neelkanth Mishra and his colleagues.

They are right to note this too:

Lastly, even for companies whose fundamentals are driven completely by domestic factors, large foreign ownership can become a risk, as forced selling continues. This is only occasionally rational, as investors sell what they can, not what they should. Just as some of the SWFs were price insensitive buyers on the way in, they are likely to be price insensitive on the way out.

This is one of the important explanatory factors of Indian market dive in recent days. Plus, Indian stocks are always too pricey for the macro fundamentals. Aspirational markets that reality, all too often, fails to meet.



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