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Go Markets are proud to introduce Nifty 50 (India 50 on GO MT4). The Nifty index is listed on the National Stock Exchange (NSE) in India and acts as a benchmark for the Indian equity markets. It is a capitalization weighted index which covers 13 sectors of the Indian economy in one portfolio.
India is the fastest growing economy of the G20 since 2014. The first quarter of 2017 saw an increase of 6.10%. This is double and even triple compared to Australia or United States. India contains a mind whopping 1.311 billion people. They’re on track to surpass China in the next 5 years to become the most populous country in the world. Unlike China, India’s population will experience growth for decades. The UN projects 1.5 billion in 2030 and 1.7 billion by 2050. An overlooked aspect of increasing population is what this means in terms of work force. An average Indian is 29 years old, prime working age. Compare this to an average American or Chinese aged 37, or European at 42 and you can start to understand the long-term prospects that India offers.
India in the recent past was a place with unimaginable poverty. In 1994 almost half of the population lived below the international poverty line, which is having an income less than $1.25. Today that number has been reduced to 23%. With more people lifted out of poverty, consumer spending has skyrocketed from 549 billion in 2006 to 1.06 trillion in 2011. Already by 2025, India is predicted to be one of the largest consumer markets. As you can see in the graph below the middle class will keep rising.
With the Nifty 50, you will be investing in a diverse swatch of the Indian market with the push of a button. The index has been performing relatively well for the last couple of years with a few falls during the Brexit referendum, US election and the demonetization move by the government.
Technical analysts have forecasted a bullish trend for the Nifty 50 in 2017. With the spot rate crossing over the moving average indicated by the red line, the Nifty is trending upwards indicating a buying opportunity. More than 70 % of the stocks in the Index has a bullish trend making it worth to have the Nifty on your watch list.
Source: GO Markets MT4
A few months ago, the market participants were taken by surprise with a rising Rupee. It has rocketed against the Dollar with more that 6 % increase. Foreign investors are seizing the opportunity as they are gaining a capital appreciation and an INR appreciation at the same time. With a stronger Rupee, the market is a bull phase.
“Growth is high, inflation is under control…by and large it is a positive indicator for the rest of the world. Inflows from foreign investors have accelerated and Indian stock market is doing very well. This shows confidence in India’s economy,” Jalan told BloombergQuint over the phone (Source: Bloomberg).
Market participants and analysts are having mixed feelings about the strength of the Rupee. Whilst it is good for the stock market, an appreciation of the Rupee can hurt exporters and the IT sector mainly. Most of the biggest IT companies in India receive revenue in foreign currencies and with the American clampdown on visas, it is another concern to be dealt with. As a result, the RBI unusual reluctance to intervene is deemed to be good for the stock market.
Would the rise of the Rupee in 2006-2008 whereby stock growth was substantial repeats itself? It will certainly be worth keeping an eye on the Nifty 50 over the next couple of weeks.
*The interest rates and dividend adjustments on the Nifty 50 will be similar to GO Markets’ other indices. Overnight interest rates for the NIFTY50 are charged based on 1 month Mumbai Inter-Bank Offer Rate (MIBOR) plus a GO Markets fee of 2.5% per annum. Dividend adjustments will be made from time to time when constituent stocks go ex-dividend and will result into a cash debit/credit. News about dividend adjustments will be published on GO Markets website under GO Market Daily News.
By: Deepta Bolaky & Sam Hertz
Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.