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The present global scenario where interest rates continue to rule at elevated levels is a major cause of concern

 The present global scenario where interest rates continue to rule at elevated levels is a major cause of concern Inflation which has been dominating discussions in leading economies seems to be tapering off and the reduction in the same would be a big relief going forward. Markets in India and many parts of the global economy seem to be on a sustained upswing. The US Federal Reserve raised interest rates by 25 basis points earlier this week to a band of 5.25-5.50 per cent which is the highest since 2001. Yet markets have not reacted very adversely to the same. The GDP on a better growth rate than anticipated has helped as has the fall in inflation compared to previous months.
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This ensures two things going forward.

  Private Equity Investors are selling large stakes in listed entities and cashing in on huge profits. In most cases the size of secondary sale through the ‘offer for sale’ mechanism is many times the original issue. This ensures two things going forward.  The first is the fact that the PE has disposable funds to re-invest in other businesses and companies in the country, and second that the stock is absorbed by other financial institutions whether they are domestic or foreign quite easily. Many promoters have also used the opportunity to cash out and take advantage of the current situation where markets seem to absorb any off-loading of shares. Roughly 42 per cent of the Nifty weightage comes from the BFSI space which is largely banking companies. This sector has done well and is leading the indices from the front. If one were to analyse the markets, valuations have begun to become a tad expensive but not as expensive to warrant a liquidation of stocks.
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