India Stock Market

Bloomberg via Getty Images

Slow And Steady: Why The Indian Market Is Doing Better Than We Think

After all the euphoria gripping the Indian market in the months just after the new government came to power, the reality at present is more sobering. Nevertheless, all is not lost and if we look beyond parliamentary affairs and the reforms hoopla, there are signs of improvement. Any rise is not linear and short-term concerns usually dwarf the big picture, especially the slow changes that often go unnoticed. Let us try to take a stock of the situation and examine the road ahead.

A Macro View Of Recent Market Volatility

China's recent devaluation of its currency has raised a lot of questions, and there has been a near-panic response across financial markets. However, we do not believe that the renminbi's depreciation is something that should come as an enormous shock to global markets. While the renminbi has depreciated about 5% over a short time frame, we believe the pace is likely to remain relatively controlled as the government incrementally moves towards a more market-driven environment. Importantly, we do not think the move is a signal of a massive depreciation to come.