How To Make Sense Of The Stock Market Sell-Off

HERE is a lot of chatter on social media about the fall in the equity markets in India.

- RAJAS KELKAR

There are estimates galore about the amount of wealth eroded due to this sell-off. Nithin Kamath of Zerodha has articulated that trading volumes have slumped across categories. That could mean lower commissions for brokers and lower securities transaction tax for the government. Foreign portfolio investors sold about $40 billion worth of Indian shares in six months, and worries about US trade relations are offered as explanations for the fall.

You may want to note that expectations of tomorrow's profits influence share prices. The way the above factors affect Indian shares needs to be understood well.

The International Monetary Fund (IMF) put out a report on India's macro fundamentals last week. The global institution expects India's economy to grow steadily over the next few years. "Real GDP is expected to grow at 6.5% in 2024/25 and 2025/26, supported by robust growth in private consumption on the back of sustained macroeconomic and financial stability," said the institution in its latest review of the Indian economy.