Money on the markets

A maturing market amid the mayhem

from Expert Zone:

Will Indian stocks end 2012 on a happier note?

(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

The rally in the Indian stock markets, fuelled by the so-called reform announcements, seems to have fizzled out. Frontline indexes have retraced more than 60 percent of the gains made since Sep. 13, 2012, the day the reform measures were made public.

Stock market sentiment turned bullish after the reforms were announced, which typically followed Europe's unlimited bond-buying plan revealed a week earlier and coincided with the launch of QE3 in the United States.

However, subsequent developments such as the Reserve Bank of India’s (RBI) refusal to cut the repo rate citing persistently high inflation at its October policy review, slowing growth and worsening trade and fiscal deficits, have dented some of that exuberance.

from Expert Zone:

2012 – Boom or Doom?

(The views expressed in this column are the author's own and do not represent those of Reuters)

What a year 2011 has been. Except certain commodities such as gold and oil, every other asset class has been hit. With Sensex down more than 20 pct YTD, 10 year g-sec yields up by almost 1 pct and rupee down by almost 14 pct against the dollar, it has been a poor year for investors. This was caused by a bout of strong global risk aversion led by the European sovereign debt crisis, high inflation in emerging markets and consequent monetary tightening, and lack of proper policy action in India. The only salvation came from commodities such as oil (up almost 26 pct in rupee terms) and gold (up almost 38 pct in rupee terms).