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market | IST

Local growth, global growth & politics are three significant challenges for markets, says Udayan Mukherjee

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Udayan Mukherjee, consulting editor at CNBC-TV18, on Monday spoke about easing global trade worries, improved outlook and also shared concerns around earnings growth trajectory and looming political uncertainty.

Udayan Mukherjee, consulting editor at CNBC-TV18, on Monday spoke about easing global trade worries, improved outlook and also shared concerns around earnings growth trajectory and looming political uncertainty.
“The market has adjusted to new realities. A lot of realities have changed, crude has collapsed, the currency has come down to below 70 per dollar, bond yields have backed off and these were the problems which took the market down to 10,000. So now these realities have changed and the market has readjusted to 11,000."
Despite ebbing worries, some concerns still remain as highlighted by Mukherjee. "However, having come here now, we should not lose our head because there are still a lot of challenges ahead. I see three major challenges for this market, principal is growth and the gross domestic product (GDP) numbers are a reminder that we are not firing on all cylinders with a core gross value added (GVA) of 6.6 percent, we should not be thumping the table on growth yet and that ties in with the kind of expectation we have of 10 percent earnings growth this year. So if you look at the micro, which is earnings growth or the macro which is GDP growth, we still have a growth problem on our hands and that is a major issue and I would say a far more fundamental issue than crude prices for the stock market per se."
With regards to the emanating political concerns, Mukherjee said, "Then we have politics which we will know in 10 days, which way the cookie is crumbling and finally we have global growth which is slowing down. So local growth, global growth and politics are three fairly significant challenges which lie ahead of us."
Sharing his outlook on stocks market, he said,"I would suggest that after the thousand point rally on the Nifty, which we will have if we get to 11,000, we need to take a break and pause for a breath and see where things stand going forward. So I think a bit of consolidation now would be in order after the rally, which was the right thing to have done for the market because of new reality."
 
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