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| As far as the global economy is concerned, the US is showing the early signs of resuscitation, Japanese numbers look better than they have for a long time, and China has become an attractive magnet for Indian exports, like steel. |
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| Looking at the microeconomics of the recovery, Indian companies in many sectors are seeing the fruits of their efforts to increase productivity. |
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| Many have benefited from a global commodity price upswing, as in soda ash and steel. The responsiveness of top lines and bottom lines to even a relatively modest macroeconomic upturn have, so far, been striking. Clearly, all these factors are combining to drive stock market valuations to levels not seen for more than two years. |
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| But is the surge of optimism, on the stock market and elsewhere (the NCAER quarterly survey of business confidence shows a massive upswing), running ahead of the real numbers? |
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And is it possible that the recovery is more fragile than the numbers, particularly those coming out of the stock market, would have us believe? The Reserve Bank doesn
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