MEMBER'S LOGINX
| Invalid Username / Password | ||||||||
| Invalid Captcha | ||||||||
|
||||||||
| Sign Up | Forgot Password? | ||||||||
India's Third Giant Leap
This Could be One of the Biggest Opportunities for Investors
- Home
- Todays Market
- Indian Stock Market News September 1, 2015
Just how much trouble is China in? Tue, 1 Sep Pre-Open
China's meltdown can be taken for granted as one of the big reasons for the current global turmoil. The panic across markets is quite conceivable when the world's second largest economy is stuttering.
A quick recap. There were two major announcements that led to this. One was the China's surprise devaluation of the yuan twice in one week. Next was the release of bearish manufacturing data that showed that its economy is indeed slowing down at a higher than anticipated rate.
Both had their impact globally. As China is the biggest consumer of commodities, this depressed the global commodity prices further. Also the global export competitiveness was affected, as a weaker yuan made Chinese imports relatively cheaper. The manufacturing data compounded the declines on a range of asset classes. Emerging market stocks headed for their worst week in three years. All in all, China has been losing its long held magnetism, and fast.
An article in Economist states how the Chinese economy itself is facing significant headwinds. Exports are stumbling. Bad loans are rising. The industrial sector is at its weakest since the depths of global financial crisis. Further, more stress is emanating from its market situation. Capital outflows from the nation have shot up as investors are giving up their hopes on the economy. A desperate move to stabilize this situation was carried out by the government. The government infused 1 trillion yuan towards buying stocks. This led to no respite however. In fact, such artificial buying rattled markets even more.
Further, debt has reached more than 250% of the GDP. The working-age population in China is shrinking. Goods moved by rail have declined and producer prices are caught up in a deflationary spiral. In fact, reports indicate skepticism that add up all of these factors and the annual growth for nation may be just 2-3%!
All in all, China stands out as a troubled economy. Alarm bells are ringing all around as it could drag other economies down with it. A fundamental reassessment coupled with a range of reforms that take it from an export oriented economy to a consumer driven one seem like the only thing that can open new doors for growth.
While the prospects of this shift happening in a hurry look remote, macro economic developments often have a way of upturning expectations. Only time will tell how China's story, which looks awfully grim right now, will pan out in the years to come.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!
Read the latest Market Commentary
Indian Share Market Update: Top Gainers and Losers
ABOUT EQUITYMASTER
Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.
PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
- Multibagger Penny Stocks
- Basics of Value Investing
- Benjamin Graham
- How to Invest in Gold
- How to Invest in Silver
- Best Stocks to Buy Today
- Best Small-cap Stocks to Buy
- Best Bluechip Stocks to Buy
- Guide to Penny Stocks
- How to Invest in the Share Market
- Warren Buffett - The Value Investor
- Pick the Best Multibagger Stocks
TRENDING TOPICS
Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).
Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407
Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com
LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
Equitymaster requests your view! Post a comment on "Just how much trouble is China in?". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!