Hello reader, hope you’re doing well. Unexpected events frequently have an impact on stock markets. When market valuations are high, there will be a significant sell down. This is what happened in global markets following the reduction of the US credit rating by Fitch. From a market standpoint, the key question now is whether this will have an influence on the fundamental causes fueling the global market boom. No, it does not. The story of the US economy’s gentle landing, which is driving the ongoing global rally, remains intact and strengthening. GDP growth in the United States is strong, while inflation is decreasing. 80% of US firms reported better-than-expected quarterly results. This key macro component is unaffected by the Fitch rating. The emotional impact of the reduction is expected to disappear quickly.
India’s values remain wealthy in the short term, but reasonable for long-term investors. Market weakness can be exploited to gradually accumulate high-quality stocks that have corrected. Leading equities in the banking, capital goods, and construction-related sectors appear to be solid long-term investments.
India’s per capita income to jump 70% by 2030. Imagine what it will mean for consumer discretionary, Luxury travel, premium real estate etc. There is immense potential in the market. Journey will see short term corrections, sideways movement, global headwinds. One needs to keep head down and keep investing.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.