ITV

Tag: stock markets

  • Understanding Rates and Money in India: A Key for Growth and Investment

    Understanding Rates and Money in India: A Key for Growth and Investment

    India’s interest rates are extremely important for how the economy grows, affecting what it costs to borrow money, save, and invest. Low rates are key for helping industries grow, helping people borrow, and bringing in money from foreign places. The Reserve Bank of India (RBI) runs things on money management, focusing on keeping prices stable and the economy steady.

    Current Interest Rate Situation in India

    In India, rates have changed due to shifts at home and worldwide. Over time, the RBI has used money tools to try to control rising prices while supporting steady growth. Low rates help more people access loans for education or homes or starting businesses. This boosts local spending which helps grow the economy.

    Repo Rate and Costs 
    The repo rate is now 6.5%, which is a key number to understand borrowing costs in the country. By keeping a middle-rate level, the RBI helps keep loans affordable for both companies and everyday people. This is meant to encourage investments in big areas like infrastructure, making things, and tech while also aiding small businesses.

    Outside Factors Affecting Rates 
    India’s interest situation connects with the rest of the world. Global happenings like decisions of the Federal Reserve, oil price changes, or global conflicts impact India’s rate changes too. These outside elements force RBI to be careful so that economic stability stays but affordability doesn’t drop.

    How Low-Rate Money Fuels Investments

    Interest costs influence how costly it is to get money which affects how companies act about market chances. When rates go down, it creates good conditions for investments across many areas.

    Business Growth 
    With lower interest costs for loans, companies find it easier to expand or buy new assets or technology. Reduced repayment amounts improve cash flow allowing firms to reinvest back into their work which can create job opportunities.

    Real Estate Growth  
    Low-interest conditions stimulate activity in India’s housing sector as more accessible home loans let more people buy property affordably. Leading developers also benefit from cheaper funding resulting in better prices driving up supply levels in real estate markets.

    Tech’s Impact on Rate Changes 
    The quick growth of financial tech (FinTech) has changed how businesses interact with interest rate factors. People and sellers deal with money rules. Easy tools, fast data checks, and simple designs help users to make smart money moves.

    Smart Market Data 
    Sellers and investors gain from up-to-date info and prediction tools that are helpful in sensitive rate markets like forex or commodities. Using items like a trading calculator allows users to guess profits, refine plans, and lower dangers.

    Stock Markets 
    Low-interest situations usually lead to good times in stock markets because cheaper borrowing increases company earnings enhancing investor trust too. This trend appears particularly strong when traders look towards indices trading as market indices reflect overall economic well being.

    Problems in Keeping Low Rates

    While low interest rates are good, keeping them that way is tough.

    Rising Prices 
    A big issue is holding growth while managing rising prices. Too low rates can cause too much activity where more loans push prices up, making things less affordable.

    World Economy Worries 
    Global issues like changing oil costs, trade fights, and tightening money in rich countries can hinder India’s chance to keep low rates. For example, higher US rates might pull funds from emerging areas like India, stressing local rates.

    Money Limits 
    Big government debts can limit what the government can do about interest rates. Finding a middle ground between cutting debts and growing support is a big policy task.

    Loan Access Issues 
    Even with low rates, getting cheap loans isn’t equal for everyone—especially for small businesses and rural folks. Boosting financial access is vital so more people enjoy lower rates.

    Policy Ideas for Better Rates

    To keep the benefits of low interest alive, we need a multi-step plan:

    Careful Money Policies: The RBI should stay careful—balancing price control with growth support. 
    Help for Small Businesses: Giving more financial backing to small businesses can extend the perks of lower rates through encouraging new ideas.

    Investment in Basics: Pushing investments into basic structures can raise productivity and long-term chances.

    Education on Finance: Teaching people about money rules and loan choices helps them make smarter money moves.

    As India handles a tricky global economy scene, keeping reasonable interest will need wise policies and active moves. With focus on steady growth and tech use, the nation is set up well to make the most of accessible borrowing and strong investments.

    Disclaimer: This article does not have journalistic/ editorial involvement of indiantelevision.com. indiantelevision.com group or its websites does not endorse/ subscribe to the contents of the article/advertisement and/or views expressed herein.

    The reader is further advised that Online Casino, Betting, Online Gaming , Crypto products, Financial Investments/Engagement , NFTs, Products associated with health, wellness, and food are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions or risk associated with health conditions.

    Indiantelevision.com group shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the views, opinions, announcements, declarations, affirmations etc., stated/featured in the same. The decision to read hereinafter is purely a matter of choice and shall be construed as an express undertaking/guarantee in favour of indiantelevision.com (indiantelevision.com group) of being absolved from any/ all potential legal action, or enforceable claims. The content may be for information and awareness purposes and does not constitute financial advice. 

  • Effect of Stock Markets on Economy: All You Need to Know

    Effect of Stock Markets on Economy: All You Need to Know

    The undeniable interplay between finance and economic growth has become increasingly evident. Central to this dynamic are the financial markets. It has become a pivotal component of modern economies. But it influences not just individual investors but entire nations.

    The growth in these markets is a barometer of business confidence and a catalyst for investment. Its fluctuations send ripples through industries, influencing hiring, production, and innovation. All these trends ultimately shape the nation’s economic trajectory.

    Historical Trends of Correlation Between Stock Market and Economy
    The general consensus is that these two entities are intrinsically linked. The nature and strength of their correlation have fluctuated over time. By checking the historical trends, you can get valuable insights into how these fluctuate.

    Check out the relationship between the Nifty 50 Total Returns (TR) Index and GDP growth in the last 10 years from 2021. This will help you understand how this correlation has shaped market dynamics and economic performance.

    Year Nifty 50 TR Index GDP Growth
    2021 24.6% 9.05%
    2020 16.1% -5.83%
    2019 13.5% 3.87%
    2018 4.6% 6.45%
    2017 30.3% 6.80%
    2016 4.4% 8.26%
    2015 -3.0% 8.00%
    2014 32.9% 7.41%
    2013 8.1% 6.39%
    2012 29.4% 5.46%

    How Stock Markets Impact the Economy
    The financial market is often seen as a determinant of the economic health of a nation. But its influence extends far beyond being a mere indicator. Check out how stock markets affect different economic indicators-
    Effect on Wealth
    The stock market is a significant contributor to wealth creation in the following ways-

    • When stock prices rise, investors see an increase in their net worth
    • This wealth effect can boost consumer spending as individuals feel more confident about their financial situation
    • A decline in stock prices can lead to a decrease in wealth
    • It may result in reduced spending and a slowdown in economic activity

    Investment and Financing
    The stock market is a crucial platform for companies to raise capital. Here is how it works-

    • By issuing stocks, businesses can obtain funds for expansion, research and development, and other growth initiatives
    • This investment fuels economic growth by creating jobs and stimulating innovation
    • The stock market provides a liquid market for investors to trade in securities, facilitating efficient allocation of capital

    Economic Sentiments
    Investor sentiment is closely tied to the stock market’s performance. Check out the effect of stock markets on these sentiments-

    • When the market is rising, it generally reflects positive economic expectations
    • This optimism can encourage businesses to invest, consumers to spend, and job creators to expand their operations
    • A declining market can dampen economic sentiment, leading to reduced spending and investment

    Inflation and Interest Rates
    The relationship between the stock market and these two economic indicators is complex. Check out the correlation between them below-

    • Rising inflation can erode the purchasing power of future earnings, negatively impacting stock prices
    • Central banks often raise interest rates to combat inflation, which can also put downward pressure on stock prices
    • These factors can vary depending on other economic conditions and market expectations

    Resource Allocation
    The stock market plays a vital role in allocating resources efficiently in the following ways-

    • You can direct your capital towards companies you believe have the best growth prospects through portals, such as Bajaj Markets
    • This process channels resources to innovative and productive businesses, contributing to overall economic efficiency
    • By rewarding successful companies, the market helps ensure that resources are allocated to their most productive uses

    Corporate Financing
    For corporations, the stock market is a primary source of external financing. Check out how stock markets allow businesses to acquire finances-

    • It allows companies to raise funds for growth, acquisitions, and other strategic initiatives
    • A healthy stock market enhances a company’s ability to access capital, which is crucial for its long-term success
    • The market also provides a mechanism for companies to reward shareholders through dividends and stock repurchases

    Investor Confidence
    Investor confidence is a crucial factor influencing stock market performance and, consequently, the economy. Check out its impact on the capital market and the economy-

    • When investors are optimistic about future economic prospects, they are more likely to invest in stocks
    • This can drive market prices higher, indicating higher growth for businesses
    • A decline in investor confidence can lead to selling pressure, causing stock prices to fall
    • This feedback loop between investor confidence and market performance can amplify economic cycles

    It is undeniable that the stock market and economy typically move in tandem over time. However, the short-term fluctuations can be dramatic and misleading. Recognising the nuances of this interaction helps make strategic decisions amidst market volatility.

    Diversification across asset classes can help cushion the impact of market swings, which you can achieve through the Bajaj Markets App. It also allows you to maintain a steady course toward your financial goals, regardless of the market’s erratic behaviour.

  • Save Lives and Money…. #BandKaroBazaar, ZEE Business makes clarion call to shut down Stock Markets

    Save Lives and Money…. #BandKaroBazaar, ZEE Business makes clarion call to shut down Stock Markets

    Coronavirus is affecting both global and domestic markets dearly. In the last month since the outbreak of the COVID-19 virus, the global markets have corrected to the tune of over 20% while the domestic markets have dipped more than 25%. The whole world is taking preventive measures to combat this deadly virus. Both government and private organisations have implemented 'work from home' policy to ensure the safety of their employees. Now, ZEE Business Managing Editor Anil
    Singhvi has given voice to stock market investors and made a clarion call for the closure of the Indian
    share market as well. Applauded by Market Experts on Air as #BandKaroBazaar being a prize winning campaign, Mr. Basant Maheshwari, Market Expert ; Mr. Ajay Bagga, Market Expert ; Mr. VK Sharma, HDFC Securities, Mr. Sanjeev Bhasin, IIFL Securities amongst many others have been a strong support.

    While moderating a program on ZEE Business, Anil Singhvi pointed out the impact of Coronavirus on the Indian indices and suggested SEBI and the government to think about closing the Indian stock market and focus fully on combating Coronavirus. Singhvi said that in this volatile share market, a smart stock market investor needs to safeguard both his life and wealth. Singhvi said that the concerned authorities must act quickly to take a call on shutting down the Indian stock market. It is with such strong content that ZEE Business engages, informs, educates and guides viewers and is the most preferred destination for Hindi Business News.

    On why the stock market has to be shut down, Singhvi said, "Work from home is possible for various organisations (both government and private) but for the stock market, it's impossible." He said that there is no such technique available in current circumstances where the stock market can be run by asking its employees to work from home. To ensure a big momentum is built for this demand, ZEE Business has initiated a social media campaign to shut down the market with this hash tag –
    #BandKaroBazaar. This has been trending on Twitter now on the No.1 spot. There is also a social
    media poll on whether Stock Market should be shut down and its receiving a strong traction from Investors, Market Experts. We encourage you to participate in this poll. The poll is available on the Twitter and Facebook accounts of Zee Business.

    FB:  https://www.facebook.com/pg/zeebusinessonline/posts/?ref=page_internal

    Twitter: https://twitter.com/ZeeBusiness/status/1240113537718116354

    After ZEE Business made this call to shut down the stock market, #BandKaroBazaar has started trending globally while in India, it's the second most trending call on Twitter as of now.