Indian Stock Market

Indian Government is taking number of steps to attract Foreign Fund to the Country. Last Month the interest rate on NRE Deposit was liberalized which leads to most Banks has increased the interest rate on NRE deposit. This will induce NRI to park some Money in India Recently Government has decided to allow foreign Individual Investors to directly invest in India Stock Market. Till now these Foreign individual investors were allowed to Invest through Mutual Fund & Institutional route.  This will gradually reduce over dependency on FIIS flows. Indian Equity is one of the worst performing Equity market in the World during the year 2012. Both SENSEX & NIFTY lost almost 25% each during the year by being the second worst year in the Indian Equity History. Rupee also performed miserably during the year and closed at 53.09 after seeing the record low of 54.30. RBI acted swiftly in December to stop further fall of Rupee. The primary reason of INR depreciation is poor Indian Equity market forcing FIIS to take Money back to their Home Country. Other reasons like US & Euro zone factors also forced FIIs to take back the Money. Poor FDI to India during the year was also a cause of concern. It is expected that INR will appreciate gradually starting from Feb 2012.  India Food Inflation has come down to below 1% ( 0.42%) in the latest release prompting the Economist to see the WPI inflation to come down to 6% ( from present 9.2% ) and also brightened the possibility of downward phase of interest rate  by RBI