Stock market bubble – Navshakti

Bubble in the stock market

GDP to fall by 8 per cent, RBI warns investors

Mumbai: The stock market is currently bullish. The stock market has crossed 50 thousand. However, the current rally in the stock market is just a bubble. The reality is somewhat different, the RBI said in its annual report. At the same time, the GDP is projected to decline by 8 per cent in the current financial year, a warning to investors.

The Reserve Bank of India (RBI) has released its report for the financial year 2020-21. The Bombay Stock Exchange had touched 52,154 in February. Currently the stock market is over 50 to 51 thousand. The stock market is trading at more than 100 per cent as compared to March 23 last financial year. At the same time, in the financial year 2020-21, the stock market transactions increased by 68 percent. However, the RBI has said that the stock market rally could lead to a historic fall in the near future. The RBI has also pointed out that the rise in risk premiums during the Corona period is also a matter of concern. From 2016 to early 2020, the stock market rallied due to lower interest rates as well as lower equity risk premiums. The RBI report also said that further earnings were expected.

The RBI has said that the money that has been invested in improving India’s economy is likely to push up property prices. Meanwhile, foreign investors are currently withdrawing large sums of money from the market. The amount of money withdrawn by investors in April was huge.

For the financial year 2021, the RBI has projected a GDP growth of 10.5 per cent. It is projected to grow at 26.2 per cent in the first quarter, 8.3 per cent in the second quarter, 5.4 per cent in the third quarter and 6.2 per cent in the fourth quarter. Meanwhile, GST collection has seen good growth for the seventh consecutive month. GST collection exceeded Rs 1 lakh crore. The RBI report also said that this shows a boom in services and construction.

Inflation will rise

Pulses and edible oil prices are likely to rise sharply against the backdrop of gap between supply and demand. The RBI report also said that huge production in 2020-21 could lead to lower grain prices. The RBI report also said that global crude oil prices are expected to fluctuate in the next few months.

Tags: GDP will shrink by 8 percent, Mumbai, RBI, Reserve Bank of india, Stock Market

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