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> Dropping trust
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Losing faith in Indian market
Investors are demanding stocks in India more than in any of the other largest markets of any developing countries across the world. Moreover, the price-to-earnings for the entire market fell by 33% as foreign investors turned net sellers.
However, investors are losing faith in Indian market, even after the Sensex leaped 13% from its March’08 figure, as most Indian corporations are producing lesser commodities compared to its counterpart BRIC. Even India’s GDP is growing slower compared to other BRIC countries. India is also the only one among the BRIC nation’s where economic growth is forecasted to slow down again in 2008. Analysts estimate 2008 earnings to be lowest among the BRIC. Even the industrial output growth slowed to a 6-year low and thus further lowered the trust of foreign investors.
The ray of hope among these dark clouds is the latest Business Week report. In its ranking of 50 most innovative companies, two large India-based conglomerates (Tata & Reliance) figure prominently on the list. Moreover, no other BRIC country had even one entry into the Top 50 list. This should encourage India polity to pay heed to investment related issues and boost industrial growth or will it?
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