Economic Survey: Street view

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India's benchmark Sensex is down 17 per cent so far this financial year and over 20 per cent since February 28, 2015, when the Economic Survey 2014-15 was tabled in Parliament. Weakened global economic outlook, sharp drop in commodity prices and poor corporate earnings have taken a toll on the market performance over the last one year.

Indian markets have gone from outperformer to underperformer due to sharp selling by foreign institutional investors (FIIs), who had overinvested in India. FIIs have pulled out over Rs 35,000 crore ($5.2 billion) from the domestic stock market so far in 2015-16. Foreign investor selling is likely to continue as most global markets have entered bear territory.


On the positive side, the fall in the crude oil prices has come as a boon to India's fiscal situation. Indian basket of crude oil has declined 44 per cent so far this financials year, extending last year's drop of 49 per cent. Oil prices too are likely to remains soft some more time. Agricultural commodities, like sugar and wheat, are in recovery mode but pulses are on other extreme with government still not able to control prices.

MCX Agri Spot index is 15 per cent higher. Cotton has remained soft, edible-oils also largely under control. Metals prices have fallen only marginally during the year due to lower rupee, although globally metal prices have seen a steep fall. In other words, lower currency deprived infrastructure projects from that benefit, except steel. Gold, silver are on a recovery mode. When metals recover internationally is not known but that will be a pressure point for consuming companies.