10 key take away from 2016 stock market
The year 2016 was expected to be neutral to negative by most of the global players during the last phase of the 2015. This was largely due the 8 year cycle which triggers the corrective pattern in Indian markets. Meanwhile global investors were expressing the concerns over European Union (Greece and British exit). But for Indian markets it was proven to be neutral with shades of positive and negative. But the global markets managed to post smart gains.
Here are the major events across the globe that affected the Indian markets during 2016.
- Oil weakness begins pressuring the equity markets as it was viewed as demand side concern during the early phase of the markets.
- Government’s initiative on GST was well taken by Indian stock market; it can bring down the tax complication and transparent account systems.
- Unexpected but true that the Great Britain have exited from European Union (BREXIT). British prime minister has resigned; the GBP and EURO witnessed significant sell off.
- RBI Governor Raghuram Rajan discontinues from second term, Indian corporate, bankers were unhappy as we were leaving an outstanding economist.
- Cross border tension were increased when India conducted a surgical strike in Pakistan occupied Kashmir; Indian market witnessed selloff.
- TATA group of companies is the largest and favorite for various institutions in terms of governance and stable returns. But the tussle over the leaders increases the tension among its investors.
- Indian government took hard stance against corruption and parallel economy, its currency demonetization. It got mixed reaction from various market participants.
- Donald Trump elected as the next US president, totally unexpected by market players. This triggered significant selloff, but global equity market witnessed V shaped recovery.
- FED rates were hiked after a long time, took money from various markets to US. This results in depreciation in Indian currency and FII outflow.
- Hype created on demonetization was not well handled in terms of implementation. As a result, liquidity crunch and demand side concerns are getting bigger day by day.
Going forward, we could see some uncertainty over the implication of demonetization. Meanwhile to reduce the pressure among public and small scale business, government may come up with popular budget. The talk over demonetization has extended the implementation phases of GST; this could be seen as negative.
Meanwhile we can’t ignore the sayings of Mr. Sir John Templeton on Bull Markets.
“Bull markets are born on pessimism, grown on skepticism, matures on optimism and die on euphoria”
These are the 10 events which determined the Indian Stock Market direction for the year 2016. If you could tell us any other event which affected the Indian Stock Market, please comment below.