Equity markets of US and Europe are on the verge of crash. It would not be an utter collapse the one we witnessed in 2008, but a correction of 15-20% looks inevitable.
Dollar looks quite ready to go up absorbing flow that comes out of equities.
Indian equity market has shown some resistance in recent past. Was that strength or trap ? In next few days, we will come to know that.
As such our economic condition is weak, demand is also decelerating, banks are in weak position, manufacturing has been contracting for quite some time, services (the major contributor of India GDP) has been steadily shrinking. Our GDP is at decadal low. In this situation, it is obvious to expect that our market should fall in tandem will global peers. Let us see, how much resistance rupee exhibits this time.
It seems that rupee will fall to 64-66 in next few months before strengthening for long period.
It will be interesting to see where the money flows from developed markets.
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