Mar 11, 2013, 05.53 PM IST
Ruchir Sharma, MD and head emerging markets equity team, Morgan Stanley, shares his view on current account deficit (CAD), the key issue which India faces and the gap which is widening in every quarter.
India is facing a serious issue of widening current account deficit (CAD). Ruchir Sharma, MD and head emerging markets equity team, Morgan Stanley feels that CAD is being funded by global liquidity which is a concern. India will face real problem if there is a bit fall in global liquidity due to macro economic problem.
"CAD remains a major concern which is a symptom of wider problem. The problem is that people don't have enough confidence to save in financial assets, manufacturing sector is showing poor performance and investment is funded largely by public side not the private side," he adds.
However, he feels that Indian market still looks reasonable and no other world market is as co-related to other emerging markets as India.
Sharma said, "India will follow global cues and trends. I don't see that path breaking away. If there is serious productivity enhancing reforms then there will be upside path breaks. I am not holding my breath for that and it will happen overtime. On the downside, that coalition can break if there is some macro economic trouble in the world which leads to a period of risk aversion because then the current account deficit funding becomes an issue."
Intermediate top in Nifty is probably in process. Markets may move towards distribution or correction; Monday may have seen an exhaustion gap in Nifty
ALL GOOD THINGS COME TO AN END. The rally in Nifty which started from 5975 and touched 6415 may now be coming to an end. Fresh buying should be done only after some downward movement in prices has taken place.
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