Reuters blog archive
from Expert Zone:
(Any opinions expressed here are those of the author and not of Thomson Reuters)
It’s reasonable to ask whether the Indian stock market has lost steam after the blistering run-up seen over the past couple of months. Since August, the markets have rallied about 40 percent, with many stocks in high-beta sectors such as infrastructure generating a return of more than 100 percent. At a one-year forward price-to-earnings (P/E) multiple of 15x, the Nifty isn’t exactly cheap for retail investors right now.
The Narendra Modi-led government, which contested and won the elections on the development plank, is expected to push for reforms in no time, taking on knotty issues related to taxation and infrastructure.
Of course, there is much it must do before the improvements begin to show -- from fast-tracking older projects and resolving mining issues to longer-term imperatives such as keeping inflation under control and achieving fiscal consolidation. But there is no gainsaying that all this will improve the earnings outlook of companies and mark the beginning of a structural bull run for the market.
So what must be the strategy of retail investors now? Calculations suggest that in the current scenario, the Nifty will go into overbought territory beyond 7,400 points. Hence, a fundamentals-driven equity strategy, with an investment horizon of between three and five years, can generate better returns.
Euro zone policymakers like to talk. They often contradict each other at separate speaking engagements on the same day. But they have struck a chorus in recent weeks, asserting that deflation is not a threat.
Members of the ECB Governing Council have been particularly vocal, insisting they will not have to alter policy to counter falling prices.
from India Insight:
India's information technology services businesses will continue to benefit from improving client demand from developed countries in 2014, pushing stocks higher after a stellar performance last year, analysts told India Insight.
India’s No. 1 IT services exporter Tata Consultancy Services (TCS) and its rival Infosys beat analysts’ expectations in their financial results that were released earlier this month. They also raised their sales growth forecasts on signs of improving economies in the United States and Europe.
from India Insight:
from India Insight:
Fitch Ratings revised India's sovereign rating outlook to "stable" from "negative" on the back of measures taken by the government to contain the budget deficit, it said in a statement on Wednesday. The rating agency had cut India’s outlook to negative in June 2012 and currently has a 'BBB-' rating for the country.
“Fitch expects the government to broadly meet its FY14 budget deficit target of 4.8 percent of GDP (including privatisation receipts) and to gradually reduce the high level of public debt over the medium-term,” the rating agency said.
The Great Recession set the U.S. labor market so far back that there is still a long way to go before policymakers can claim victory and point to a true return to healthy conditions, a top former Fed economist said. The U.S. economy remains around 3 million jobs short of its pre-recession levels, and that's without accounting for population growth.
“The goal line is still a long ways off,” David Stockton, former head of economic research at theU.S.central bank’s powerful Washington-based board, told an event sponsored by the Peterson Institute for International Economics. He sees the American economy improving this year, but believes the recovery will continue to have its ups and downs.
A panel of economic luminaries took the stage in Chicago this afternoon to join in a tradition repeated this time of the year in cities across the country, opining on the outlook for the coming year.
Raghuram Rajan, a finance professor at University of Chicago’s Booth School of Business, began with a joke involving 973 sheep and a dog, the butt of which was the intellectual capacity of economic forecasters. He went on to predict slow world growth ahead, highlighting the geopolitical risks from conflict in the Middle East and Asia, and the limits of fiscal and monetary policy to turn things around.
When it comes to predicting a dark future, Nouriel Roubini – the NYU economist who earned the moniker Dr. Doom after he correctly predicted the financial crisis – is not about to let anyone get in his way.
Even if it’s his host. And even, or maybe especially, when there are 500 witnesses.
Federal Reserve Chairman Ben Bernanke’s verdict on the U.S. economy is sobering. Boiled down, this was the message delivered at his news conference today:
Brace for roughly three more years of sluggish growth – or longer
Some of the unemployed will not find work in the foreseeable future
America’s economic power has downshifted
Global financial markets could upend recovery yet again
It is a bleak outlook. Bernanke has left little doubt that he sees the United States in the midst of very long and painful period of sub-par growth, dousing some of the optimism stirred by recent reports that showed unemployment falling, the housing market hitting bottom and businesses starting to spend again.
from Funds Hub:
Mark Lyttleton, manager of the 1.5 billion pound BlackRock UK Absolute Alpha fund, gives his view on the recent rebound in the equity market and his outlook for the rest of the year and beyond.