Published On : Thu, Jan 21st, 2016

What led to markets losing all they gained since Modi became PM

The Indian markets have nosedived over a combination of internal and external factors. In fact, the markets seem to have lost all that they gained since May 16, 2014, when Prime Minister Narendra Modi-led NDA to a comfortable victory in the Lok Sabha polls.

Here’s a look at the factors:

Factor 1: Plunging crude prices
US crude plunged to its lowest level since 2003 as the global market drowns in over supply.

Factor 2: China-led global slowdown
The IMF has slashed its global forecasts after new figures from China showed that the world’s second-largest economy grew at its slowest pace in 25 years in 2015.

Factor 3: Weakening Rupee
The rupee is inching closer to a record low of 68.85 to a dollar. Foreign investors are pulling out of emerging markets including India which is pushing down the rupee’s value.

Factor 4: Slow earnings growth
Corporate earnings and domestic demand have remained sluggish for some quarters now as investors are looking for more reforms.

Crucial bills like GST & land acquisition are stuck in Parliament due to political logjam.