Indian Stock Market 2016 - Many Got Trapped Off Guarded

Indian Stock market started 2016 with positive note. The series of policy decision which kick-started economy impacted Indian listed companies result which resulted in strong rise in their price. Economy started moving in the right direction with many large to mid cap to small cap companies share price observed renewed interest by all quarter of Investor.

The unfortunate Demonetization of 500 & 1000 currency bill as poison pill for Indian economy. The discontinuation of 86% of the floating currency literally stalled the business as citizens were in the queue of bank instead of marketplace. All economic indicators such as CPI, WPI, IIP went for tailspin. The service sector experienced major contraction whereas sectors like Consumer, FMCG, Hospitality, mining and other experienced more or less complete paralysis of business activities.

Concurrently, the win of Mr. Donald Trump sent the bond market in tailspin and Foreign Institutional Investor sold billions of $ worth of equity and bond but bond segment dominated. Additional burn to injury experienced with gradual rise in Oil prices post OPEC 1.2 million barrel oil product cut in close coordination with Russia impacted Oil Import bill. The higher demand of $ sent Indian currency. The crackdown on Black Money by Indian central government forced them to hit gold sector which impacted the companies operating in that segment.

The end of 2016 will be nasty for Equity to bond investor dearly and it is expected that the trend will continue till the early 2017. During 2016, many good companies share achieved lifetime high but Demonetization drive kicked their equity price down by 30 to 40 %.

The unceremonious exit of Cyrus Mistry as Chairman of Tata Sons followed by media dual impacted Tata Group companies and investor lost more than $11bn in market capitalization. As we all know that Indian market is predominantly depend on Future and Option market and Indian Prime Minister Mr.Narendra Modi move on Demonetization left F&O market player off guarded and lost huge money in the Indian Stock Market.

It's a saying that after every heavy rain, there will be sunrise and similarly, Indian Stock market will be ripe for investment in 2017. Stay tuned as I will be posting my stock pick for 2017 which is nothing but wealth creator.

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.