Geopolitical risks to outweigh economic concerns: Angel
According to the research firm, taking cues from the ongoing economic and geopolitical developments, the impact on the Rupee is expected to be negative and in the near-term to short-term period, further depreciation in the Rupee is expected to be seen.
September 04, 2013 / 18:30 IST
Angel Commodities report on Indian economy:
Indian economy in shackles as Rupee remains weakWith importance on policies and strategies in order to reduce the CAD and control Rupee depreciation; it is to be seen that this weakness in the currency has been long built and is not only a result of the current consequences.India’s economic and financial market scenario has deteriorated sharply and from risks of downgrade to expectations of further capital outflows in the event of a QE taper by the Fed is acting as a major negative factor for the domestic currency. The week ended 28th August’13 saw net selling by the FII’s to the tune of $609 million, while collectively, countries like Taiwan, Philippines and Thailand saw around $300 million of net selling.The Indian economy is in shackles as a weaker Rupee is having a downbeat effect on the overall economy. From rising prices of imported commodities, to inflation risks along with the expected increase in the fuel subsidy burden; India’s structural issues are multiplying. Currently, external and internal, both situations are grim, especially with the upcoming pullback of the quantitative easing program.Geopolitical risks to outweigh economic concerns in the coming daysWhile Syria does not contribute to major oil and gas production, the risk arises from this geopolitical tension spreading to other Middle Eastern oil producing countries as well. There are fears of growing military intervention in Syria and this has led to increased risk aversion in the global markets, with equities from Asia, Europe and the US witnessing sell-offs. Higher crude oil prices will further affect the global economy and in turn keep a check on the gains in higher-yielding and riskier investment assets.Rupee to weaken in the near-termTaking cues from the ongoing economic and geopolitical developments, the impact on the Rupee is expected to be negative and in the near-term to short-term period, further depreciation in the Rupee is expected to be seen.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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