Experts said domestic woes,
including ballooning NPAs reported by banks and weak quarterly numbers in
various other sectors, also added to the market weakness recently.
Big bang reforms will not be the operating
template for India and the process will be a 'slow and tedious one', says a
Morgan Stanley report.
The global
financial services major said that the recently announced Budget for 2016-17
has proved once again that major reform initiatives will not be the operating
template for the country.
"Reforms in India will be a slow and
tedious process, requiring the buy-in of the opposition and the
bureaucracy," it said. Since the beginning of this year, Indian markets
have seen heavy volatility largely owing to high fluctuations in global markets
led by the Shanghai Composite and domestic events such as the Union Budget, it
said.
The Indian equity markets have seen extreme
weakness due to various negative factors, including global economic slowdown
fears, falling crude prices, worries related to Chinese economy and muted
quarterly earnings.
Experts said
domestic woes, including ballooning NPAs reported by banks and weak quarterly
numbers in various other sectors, also added to the market weakness recently.
Meanwhile, the index slumped to its lowest level in 21 months, when the Sensex
crashed 807 points to drop below the 23,000-mark on February 11, this year.
"Moreover,
what was evident once again this year, is that while India may be in a
relatively better position based on external macro indicators compared to 2013,
the correlations with global markets always rise disproportionately during
periods of heightened uncertainty in other parts of the world," the report
added.
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