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The Greece financial crisis and the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) governor <keyword id="6358908" type="PERSON" weightage="20" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword>’s statement indicating the world economy may be in a tizzy has already sent jitters across the globe. But while most worry about the future in fear, analysts expect the Indian economy to be resilient to any adverse changes. 
	 “India is in a unique position to be insulated from financial shocks to a large extent due to the fiscal policies of our government. Raghuram Rajan may be right about the developed world facing a financial market crisis. There is Greece’s debt crisis and fluctuating crude oil prices as well as the recent problems with the China’s economy,” said <keyword id="972424" type="PERSON" weightage="20" keywordseo="Rohit-Gadia">Rohit Gadia</keyword>, CEO of <keyword id="1056926" type="ORGANIZATION" weightage="20" keywordseo="CapitalVia">Capitalvia</keyword>. 
	 
	He added, “There is nothing to worry much this time as India is well positioned compared to the previous period of crisis, It has foreign exchange reserves of $355 billion, relatively stable currency and improved fundamentals. Thus at this point of time Greece isn’t a major worry but it can lead to volatility and slowdown In Indian exports. Bottom line for stability in Indian markets is focus on key reforms land Bill &amp; GST and others.” 
	 
	Taking note of the Greece crisis, Rajan had noted that the policies followed by most major central banks across the globe were at the verge of slipping into ‘beggar-thy-neighbour’ situation, a strategy adopted in 1930s. 
	 “The RBI governor has showed this concerned towards worlds economy after looking at the unconventional monetary policies followed by the <keyword id="6356435" type="ORGANIZATION" weightage="20" keywordseo="US-Federal-reserve">US Federal Reserve</keyword> and <keyword id="60971" type="CITY" weightage="20" keywordseo="ECB">ECB</keyword>,” explained Gadia. 
	 
	Commenting on the impact of the statements and the current economic situation of the world on rupee, Sudip Bandhyopadhyay, managing director and CEO of Destimony Securities, brushed aside any fear of rupee value dwindling down. 
	 
	“Rupee has been stable despite the turmoil that has been there across the globe. I believe the relative strength of rupee will continue unless RBI wants it to decline,” Bandhyopadhyay noted. 
	 
	Explaining his point, he said that RBI has to take into consideration the growth of the export sector and hence there could be gradual decline in the rupee value over the next few months. “If you ask me where the rupee is heading to, then I think the currency will trade around 64 all year round against a dollar,” noted Bandhyopadhyay. 
	 
	Analysts also expected the Indian markets to be resilient to any global crisis. Gadia of CapitalVia stated that the Indian stock market is well positioned. “We think that they are much well positioned after the quick and prompt response from the central bank as well as from the government for any kind of global crisis. In India we also have seen that the RBI governor is controlling the key interest rates after taking all the factors in to consideration for a better and fruitful impact. While it can trigger short term volatility in the Indian markets but we do not expect any major impact in long term.”

Greece crisis or Raghuram Rajan's forecast! Here’s why it will not adversely impact India

The <keyword id="68997" type="UNKNOWN" weightage="20" keywordseo="insurance-bill">Insurance Bill</keyword> that was passed in the Parliament on Thursday has not only brought cheer to the industry players, but also spells good news for the consumers. 
	 “With the Insurance Laws (Amendment) Bill, 2015 being cleared by Parliament investment of around 200 bn rupees is likely to come into the Indian insurance sector over next few years. There is a lot of interest among foreign insurance companies to enter the market here as it has a lot of potential of growth. With more foreign investment and expertise, new products are also likely to be launched,” said Shashwat Sharma, Partner, Financial Services, <keyword id="50041" type="CITY" weightage="20" keywordseo="KPMG">KPMG</keyword>. 
	 
	Sharing a similar sentiment, Yashish Dahiya, CEO and co-founder of Policy Bazaar added, “The insurance bill will hand more power to consumers by ensuring flexibility in paying premium through installments, faster claim settlements, access to legal recourse and capping the agents’ commission. 
	 
	He further added that the Insurance Bill will now promote more transparency in the insurance products, thus making it easy for the consumer to understand his investment. “On the other hand, customers will have improved access to point of sales network for buying insurance policy. Moreover, online distribution channels will help consumers make an informed decision by analyzing products based on their requirement.,” explained Dahiya. 
	 
	Besides, the bill will also allow greater time frame to a policyholder to question an insurance company in case of misinformation or misleading statements. 
	 “There are many ways in which the insurance bill passed by the legislature is going to be helpful for the consumer who buys it--a few of the crucial pointers include that an insurance policy cannot be challenged on any ground after three years. This means if a fraud is detected three years after the policy has been in force, insurance companies will have to pay the policy holder. Thus, this will not lead to a distress to the consumer at the moment of urgency,” said <keyword id="972424" type="PERSON" weightage="20" keywordseo="Rohit-Gadia">Rohit Gadia</keyword>, CEO of <keyword id="1056926" type="ORGANIZATION" weightage="20" keywordseo="CapitalVia">CapitalVia</keyword>. 
	 
	Besides, the new insurance bill will help consumers at large to trust insurance products as it ensures greater consumer protection. “It gives more powers to the insurance regulator, which will make it difficult for companies to take policyholders for a ride,” added Gadia. 
	 
	The new Insurance Bill also puts a greater burden on the nominee of a policyholder too furnish proof in case of fraud. “The Bill has also added a new provision under Section 45 of the Insurance Act to shift the burden of proof on the beneficiaries of the deceased policyholder, in the event of fraud,” the Bill recommended. 
	 
	Also, the Insurance Bill is expected to pump in new investments in the sector. According to Gadia, market estimates suggested that Rs 20,000 crore to Rs 25,000 crore in foreign funds is likely to come immediately. 
	 
	“The money will help insurance companies to expand aggressively and will be beneficial for the people. It will be a big positive move for private insurers who have limited presence beyond metros and tier-1 cities. Also the domestic firms will look to expand aggressively with more money coming. More companies are likely to enter in to the insurance sector as well. This will lead to higher competition and insurance premiums may get cheaper for customers, analysts say. Insurance companies will now be able to bring innovation in products as well,” he explained. 
	 
	Interestingly, the Insurance Bill has also allowed a policy holder to refuse an assignment or transfer of a policy, if he reasonably feels that the said transaction was for trading of insurance policies. 
	 Gadia anticipates that the bill allows global insurers such as Britain's Prudential, which holds a minority stake in India's biggest private life insurer ICICI Prudential Life and others to increase their Indian stakes. And bring in innovation in the insurance sector. It could also pave the way for the year's biggest initial public offering, as HDFC Life, a joint venture between India's HDFC and Britain's <keyword id="1110792" type="ORGANIZATION" weightage="20" keywordseo="Standard-Life-plc">Standard Life Plc</keyword>, has said it would move towards a listing once the rule change is in place.

How the new Insurance Bill
will change the way you save

It’s a good news for the <keyword id="6356076" type="UNKNOWN" weightage="100" keywordseo="indian-economy">Indian economy</keyword>. If the numbers are to be believed, the Indian economy is growing and it’s growing at a steady pace. 
 
“Since Government focused on consumption led growth with focus on building infrastructure, changing tax regime and lowering nominal interest rates couple of key data already start showing improvement. For example cement production grew by 13.5% versus -2.6% year on year; electricity production grew by 9.2% in Feb 2016, versus 0.7% in November 2015. Rural and semi urban demand have shown good growth in the last three months. We see Two wheeler sales is now growing by 13% per cent year on year, which is a definite indication of rural and urban demand growth,” said Rohit Gadia, founder and CEO, CapitalVia Global Research Ltd. 
 
He further added, “Construction equipment sales have also improved, with feedback from various data provider indicating sales surging by 40% in the last four months. Oil consumption growth is up from 6.6% in November to 11.7% in February. We have seen growth spread from heavy commercial vehicles to light and medium trucks in commercial vehicles segment. This indicates a genuine activity in economy.” 
 
It should be noted that the corporate earnings is projected to deliver near to consensus growth expectation of 14-15% FY17. “The business sentiments have also improved, after a gap of almost 12 months, imports excluding oil and gems, has again moved into positive territory. CII estimates that government infrastructure investments and increased investments from the private sector will boost GDP (gross domestic product) growth to the 8% range. Thus signs of a economic revival are growing. Couple of bills getting passed in the Parliament finally, bills like the bankruptcy code getting passed in addition to the real estate and Aadhaar Bills already becoming law,” he noted. 
 
However not all data is positive. According to Gadia, there still are issues, primarily the growing NPAs of banks especially PSUs. Nevertheless, there’s data supporting strong macroeconomic fundamentals along with downward trend in interest rates coupled with the Modi government’s action, which will propel the economy to go on the growth track. 
 
<a href="http://business.inquirer.net/files/2013/08/rupee.jpg">Image source</a>

These numbers reveal how India’s economic growth is on track

The Indian capital market is betting big on the upcoming <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword>. With the global markets not performing well, market analysts are hoping that the government will announce key policy reforms in order to keep <keyword id="6355178" type="UNKNOWN" weightage="20" keywordseo="Dalal-Street">Dalal street</keyword> up and running. 
 
“There are huge expectations from the government, as already the international markets are keeping Indian economy on edges, Thus all eyes are set on the budget which can bring some shine back on the Dalal street,” said Rohit Gadia, CEO of Capital Via, one of the largest pure play financial market research and consulting company . 
 
He added, “One of the major expectation of the industry is smoothening of administrative procedures around refund claims and valuations which are plagued with inordinate delays in assessments coupled with huge revenue deposits which result in uncertainty and blockage of working capital for companies. The Government should focus on these aspects.” 
 
The market is hoping that the government will look at eliminating red-tapism which in turn will prove to be a boon for the government’s startup India initiative. “Due to delays in these procedures, many start-ups die an eventual death. Reduction in Corporate Tax is expected to promote the business environment as it is unfavourable as compared to other emerging economies,” he noted. 
 
Talking about the equity market, Gadia explained that the government will have to come up with innovative ways to create incentives for investing in the long term equity markets. “Considering the increase in cost of living, we may expect rise in the current basic exemption limit of 2.5 lakh to Rs. 3 lakh. We believe the consequent revival in economic activity will further bolster India’s position as one of the fastest growing economies in the world,” he suggested. 
 
Apart from this, lowering of securities transaction tax and removal of dividend distribution tax is also expected to work well for the markets. “Strained tax receipts given the general economic slowdown, implementation of the seventh pay commission, need to boost the rural economy after two years of subnormal monsoon and necessity of infrastructure and social investments place increased demands on the expenditure side,” he added. 
 
Thus, the Union Budget 2016-17 has an important task to keep up the positive economic outlook of India by bringing in major indirect tax reforms and addressing business concerns. In addition, the passing of Constitutional Amendment Bill for GST in this budget session, will not only help the Government to set up a positive environment but also will be a giant step towards reinforcing the perception about India as the next investment destination.

Dalal street looks at Budget 2016 to keep the steam running!

The government’s announcement to have a single cap for both foreign direct investments and foreign portfolio investors has brought cheer to corporate. A composite cap for all foreign investments is expected to boost foreign investors’ sentiments as well as help meet the capital requirements of Indian companies. 
	 “The proposal to club both <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> and <keyword id="725142" type="ORGANIZATION" weightage="20" keywordseo="FPI">FPI</keyword> will have a great impact on the foreign investments directly as it will give a clarity and reduce the ambiguity. The current norms where there were separate caps for FDI and FPI limited the investment exposure and sometimes restricted the investment opportunities,” said Rohit Gadia, CEO of Capitalvia Global Research Limited. 
	 
	He added, “Besides giving greater flexibility to Indian companies to seek foreign investments, the proposal is also aimed at attracting larger foreign investments as it eliminates the ambiguity on application of sectoral foreign investment caps, though the other side of the coin is it will result in FIIs getting greater play in few sectors immediately.” 
	 
	In terms of sectors, banking will be most benefitted by the move followed by power exchanges and commodity. “If you pick up any private sector bank, you will wont investments from FDI but mostly FIIs. In the past, banks such as Kotak Mahindra Bank, HDFC bank had gone to the RBI requesting an increase in 49% cap. So, these are the players, who will primarily be most benefitted by the move,” said Ravi Kumar Shingari, partner, Tax at KPMG India. 
	 
	It should be noted that last year, HDFC bank had received the Foreign Investment Promotion Board’s (FIPB) approval to raise its FIIs limit after a hue and cry over its existing foreign investment in the bank. FIPB had considered the parent company HDFC’s stake as foreign investment, which implied that the bank had already reached the upper limit of the FII holding cap as laid down by the apex bank. 
	 
	Besides banking, stock markets, insurance and credit information sectors will also gain from the proposal. However, some analysts beg to differ. Analysts are of the view that the single cap proposal is only a sentimental boost and will in fact curb foreign investment. 
	 
	Interestingly, experts believed that multi-retail brand retail is a very segregated kind of an investment in India. Hence, the single cap will not help the offline retail format much as foreign investors would not invest in a model through which they can only operate in selective cities. 
	 
	“The model does not work for them and it will never be a profitable investment. In the retail segment, I feel it is the eCommerce that will be benefitted the most as there is a marketplace model where the stock inventory is being held by different companies. So at present, this change will not have much impact as the present regulation is not very conducive to the multi-brand retail model,” added Shingari. 
	 
	Also, the government will ensure that foreign investment limit is being maintained in multi-brand retail sector. 
	 
	On being questioned about the impact on the ownership of company, Gadia noted that the change in caps should not affect the company ownership as the total foreign holding will remain the same. “However, a government approval would be required if there is a transfer of ownership or control of Indian companies from resident Indian citizens to non-resident entities,” stated Gadia. 
	 
	Shingari added that more than the issue of company ownership, the challenge here would be the management of the company, which may substantially be impacted the single cap rule. 
	 
	Besides, the government will also be responsible for finding ways to ensure that the liberty manages to maintain the equilibrium between the direct investments and portfolio investments. 
	 
	Nevertheless, experts believed that the proposal will have a positive impact on the foreign investments. As the liberalization of foreign investments will enable companies to raise additional equity capital from multiple sources and will immensely help in boosting foreign investments in the country.

Single cap for FDI and FPI to boost foreign
investments in country

The Reserve <keyword id="6355303" type="CITY" weightage="80" keywordseo="Bank-of-India">Bank of India</keyword> cheered <keyword id="46431" type="CITY" weightage="80" keywordseo="India-Inc">India Inc</keyword> when it slashed rates twice in the previous monetary policy review meet. However, contrary to the expectations of both the aam aadmi and India Inc, banks did not lower <keyword id="6371181" type="UNKNOWN" weightage="80" keywordseo="interest-rates">interest rates</keyword>. 
 “The banks are not in a position to lower interest rates right now. The provision for Non Performing Assets (NPA) in the balance sheets have been increasing,” said CH Venkatchalam, <keyword id="5507" type="POSITION" weightage="80" keywordseo="General-Secretary">general secretary</keyword> of <keyword id="1579093" type="ORGANIZATION" weightage="80" keywordseo="All-India-Bank-Employee-Association">All India Bank Employee Association</keyword>. 
 
He explained that because of rising bad loans, the profits of the bank will go down. “The bad loans have gone up and hence banks have to provide more. It would be unviable for them to lower interest rates in the near future. In fact the banks may increase interest on the deposits,” added Venkatchalam. 
 Expressing his displeasure over the banks’ refusal to lower interest rates, Rana Kapoor, president of industry body <keyword id="6355988" type="CITY" weightage="80" keywordseo="Assocham">ASSOCHAM</keyword> stated that with the ‘ball was in the courts of the bank’. 
 
“However, it is quite clear from the policy statement that the RBI is not happy with the banks not transmitting earlier two consecutive reductions in the short-term interest rates by way of slashing the Repo. It is up to the banks now to respond to the nudge given by the RBI,” elaborated Kapoor. 
 It should be noted that the RBI has kept the key policy rates unchanged in the first bi-monthly policy review meet today. The apex bank has maintained the repo rate at 7.5% and the <keyword id="35038" type="ORGANIZATION" weightage="80" keywordseo="crr">CRR</keyword> at 4% respectively. 
 “With the RBI choosing not to reduce the policy interest rates, demand revival in the <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">economy</keyword> and pick up in the investment cycle would remain a tall order,” he asserted. 
 However, market analysts are of a different view. Treading cautiously in the market, analysts do not expect any further rate cuts from the RBI. “With the unseasonal rains affecting the crops of the season, there is a possibility of a sharp hike in the food prices. There is also the uncertainty over the falling oil prices and Federal Reserve's decision on the US interest rates. Keeping above facts in the concern, we may not see any further rate cuts, as RBI may wait for some time for upcoming macroeconomic data,” said Rohit Gadia, CEO of <keyword id="1056926" type="ORGANIZATION" weightage="80" keywordseo="CapitalVia">CapitalVia</keyword>.

Despite Rajan’s scolding, banks ‘not ready’ to
reduce interest rates

The Narendra Modi government has been for some time now tom-toming about India’s return to growth and the return of the adverbial ‘achhe din’, however, more often than not, there have been far too few statistics pointing to the validation of these claims. What Narendra Modi can probably take heart from is the recent Foreign direct investment (FDI) inflow data which shows a doubling at $4.48 bn in January 2015 vis-à-vis the inflow in the same month a year ago. But the big question that is on everyone’s minds is if this momentum will continue. Will Modi, given the slew of announcements made during the budget as well as the reformatory legislative decisions being taken during the current parliament session, be able to build on the ‘feel good’ factor he has created? 
 
Experts and analysts from across the board seem to believe so. Analysts expect this momentum to continue, on the back of the several policy initiatives announced to boost investor sentiment in the economy. 
 
It should be noted that the government has a sharp focus on pushing up India’s place in the Ease of Doing Business list by the World Bank. 
According to Rohit Gadia, CEO of CapitalVia, the proposal to club both FDI and FPI will have a great impact on the foreign investments directly as it will give a clarity and reduce the ambiguity. He explained that the current norms where there were separate caps for FDI and FPIs, limited the investment exposure and sometimes restricted the investment opportunities. 
 
In terms of the sectors, analysts expect manufacturing and infrastructure to benefit the most as Prime Minister Narendra Modi has an ambitious dream of developing India as a manufacturing hub. Besides, the government’s intention to restructure the Public Private Partnership (PPP) model is also expected to boost FDI in critical sectors, especially infrastructure. 
 
“Re-balancing the PPP models and asking the government to take risks would motivate the private sector in infrastructure and some of the announcements like prior clearances for ultra mega projects would improve ease of doing business,” said Rana Kapoor, president of industry body ASSOCHAM. 
 
Apart from these sectors, analysts expected service, auto, biotechnology and eCommerce to also attract foreign investments. However, traditional retail is not expected to attract any foreign investments. Aviation too will not see much investment as the taxation structure and the high prices of jet fuel adds hugely to the cost of operations. 
 
It should be noted that official data highlighted that the primary source of FDI in the current fiscal year include Cyprus, Japan, Singapore, Mauritius, Germany, France, Switzerland and UK. “In the insurance sector, we can expect Japanese companies to invest here,” said Yashish Dahiya, co-founder of Policy Bazaar.

Know why foreign investors will continue investing in India

This is one of the most positive phases in the economy when the budget for FY2015-2016 would be declared. Are we expecting anything exciting from the budget? Yes, as in this year we have already seen the government taking lot of important steps each month to curb inflation, control <keyword id="52599" type="TECHNOLOGY" weightage="20" keywordseo="CAD">CAD</keyword> and to give a boost to economy.

	 
	We have seen lot of important steps for manufacturing sectors like the Make in India campaign. A boost in infrastructure will uplift the whole economy by creating huge job and growth opportunities for people across the country. And through Infrastructure Investment Trust (INVITS), the government has already started laying the foundation for the growth in Infrastructure sector in the FY2014-2015. 
	 
	CAD is already quite under control with fiscal deficit now less than 4.9%. And I am sure the focus would continue to be the same in the upcoming budget as well. Here are a few expectations from Union Budget 2015-16. 
	 
	1) Curb <keyword id="18712" type="ENTERTAINMENT" weightage="20" keywordseo="Gold">gold</keyword> imports 
	 
	To control the import of gold, we might see new schemes being launched by the government which will provide a good alternative apart from gold to hedge against inflation. 
	 
	2) Raise tax limit exemption 
	 
	Last year the tax limit exemption was extended upto Rs 2.5 lakh, which can now be further extended to Rs 3 lakh. This will act as a major relief to the majority of tax payers in the country and and would also give a boost to their savings. This would further bring up investment in the economy. Many developed countries are already opening up the doors for Investment in India, we might see important policy revisions to boost further Investment in India by foreign countries. 
	 
	3) Boost banking and infrastructure 
	 
	The banking and infrastructure are the two main sectors for which major positive announcements may be done. The government already has plans to dilute the shares of public sector banks to citizens of India and retail investors. The move will be welcomed by the people because it will provide the required liquidity to the public sector banks. It will also offer required resources to banks to support productive growth in the economy. 
	 
	4) Goods &amp; Services Tax (<keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword>) 
	 
	I also expect GST to be a positive revolution for the country which was stressed in the last financial year budget. Aa major move to expedite the process would be further welcomed. 
	 
	5) Reduce securities transaction tax 
	 
	On capital markets front, a reduction in STT of financial trading transactions can boost capital markets and further infuse confidence of domestic traders and investors to invest in the markets. 
	 
	About the author: This article is authored by Rohit Gadia, founder &amp; CEO, CapitalVia Global Research Limited

Budget
2015: Key reforms to stir up capital market in India

The `NaMo government can heave a sigh of relief as analysts do not expect the <keyword id="6356435" type="ORGANIZATION" weightage="20" keywordseo="US-Federal-reserve">US Federal Reserve</keyword>’s stimulus tapering to substantially impact the <keyword id="62830" type="UNKNOWN" weightage="20" keywordseo="Indian-Stock-market">Indian stock market</keyword>. 
	 
	“The US Federal Reserve’s decision to raise interest rates will have a short-term impact on the capital markets. The markets will get a hit when the Fed Reserve raises interest,” said currency expert Sudip Bandhopadhyay, president of Destimony Securities Pvt Ltd. 
	 
	According to analysts, the Indian market will continue to perform strongly as India continues to remain attractive amongst emerging economies. Also, market experts believed that the size of the market is large, which will provide a cushion against the impact. “We have a large number of retail investors, social investors as well as high networth participants in the capital market, which is why the market is well prepared for the tapering,” said Rohit Gadia, CEO of CapitalVia. 
	 
	Interestingly, the first hike by the US Fed is expected to happen by the end of 2015. which Vivek Gupta, director research, CapitalVia Global Research Limited explained that the US Fed is heading to raise interest rate soon, but not immediately. “The rate hike would be expected in September rather than June when the Fed is more confident about inflation and labour market condition,” he averred. 
	 
	Talking about his projections for the stock market, he estimated that since the market has been trading strongly, traders could sell when the Nifty Futures is around 9000 points. It should be noted that the Indian stock market opened on a positive note on Thursday. The Sensex was up by 334.17 points at 28956.29 and the Nifty was up 93.10 points at 8779.00. The Nifty Futures was trading at 8745 points. 
	 
	In terms of the sectors, while analysts expected negligible impact, they also suggested that traditional sectors such as infrastructure, capital goods will see some downward movement. Experts suggested that the stocks in these sectors will be impacted as FIIs are expected to pull out especially when the tapering happens. 
	 However, export based sectors such as IT and pharmaceutical are expected to do well as the hike will adversely impact the <keyword id="6355302" type="ORGANIZATION" weightage="20" keywordseo="Rupee">rupee</keyword> value. Commenting on the issue, Bandhopadyay suggested that he did not expect the rupee to cross 64 a dollar mark. “The Reserve Bank of India has done enough work and they will not allow rupee to tumble down. We are expecting the rupee to trade between 62-64 mark,” he stated. 
	 
	It should be noted that the US Fed has reaffirmed that it will hike the interest rates only after it assesses labor market conditions, indicators of inflation pressures and inflation expectations. “Consistent with its previous statement, the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range,” the Fed said in a statement.

Fed rate hike unlikely to spook the Sensex. Here’s why

BSE Sensex has crashed 600 points and hit an all time low of 25,181.63. Nifty’s index is no different; it is at a 52-week low of 7,693.50. It is being said that losses in auto, metal and realty stocks are primarily responsible for the fall. The future state of the market is no good either. Experts suggest that Nifty may slip below 7,600 and hit its next crucial level around the 7,475 mark, which is highly threatening for the Indian market. 
 
You might be wondering what is responsible for this downfall. For the convenience, we have determined 5 factors, which are primarily weighing on the domestic market. 
 
Crucial jobs data 
As the US prepares for its Federal Reserve’s decision to lift the interest rates, Asian markets like Hang Seng and Nikkei have cracked. "The monthly US non-farm payrolls data, which is expected to show that the economy added 220,000 non-farm jobs in August, up from 215,000 in July," said a Reuters report. 
 
"The combination of a healing US labour markand worries about a stumbling Chinese economy are challenging the Fed, as it heads into the policy meeting on Sept 16-17, at which it may raise interest rates for the first time since 2006," it further adds. 
 
India's macros 
GDP growth for the first quarter of the financial year came in at 7.0 %, compared to the median consensus expectations of around 7.5 %. This came in as a clear disappointment for the market and indicated a slowdown from the 7.5 % growth reading recorded a quarter ago. 
 
The country’s manufacturing growth eased slightly in August from the six-month high recorded a month ago. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) declined to 52.3 in August from 52.7 in July, as per the data released by Reuters this week. 
 
 
Technical charts 
Though India is at a better position than many of the Asian countries’ markets, experts say, more downside could make the indices slip another 4-5% in near future. 
 
"We are expecting a further selloff in the market due to continuous selling by and negative global sentiments, leading to a downward movement. Technically, Nifty can test the 7,450 level and if this level is breached, the next level to watch out will be 7,000," Rohit Gadia, Founder &amp; CEO, CapitalVia Global Research told <a href="http://economictimes.indiatimes.com/markets/stocks/news/top-five-factors-weighing-on-the-indian-market/articleshow/48801758.cms">The Economic Times</a>. 
 
Selling by FIIs 
As FPIs continue selling, global stock market volatility is likely to stay. FPIs withdrew a net Rs 17,428 crore (biggest since Jan 2008) from the domestic stock market in August, according to depository data. However, since the beginning of the year, FPIs have made a net investment of Rs 27,522 crore in equities and Rs 38,704 crore in debt. 
 
A Citi report , China's move to devalue yuan and the depreciation in other world currencies with respect to the US dollar is a major factor, which triggered risk aversion. In Asia, bond funds saw $1.2 billion outflow and equity funds witnessed an outflow of $8.3 billion. 
 
India competes with China in textiles and apparels. Now with a cheaper Yuan, it becomes more difficult for India to export these products, while China is offering the same at a less price. 
 
China effect 
The ECB said further trouble is possible from China, which has paved the way for an expansion of its already massive 1 trillion-euro plus asset-buying programme. Global markets were shaken by volatility in the past two weeks, triggered by fears of slowdown in growth in China. 
 
In an attempt to stabalise its markets, China announced tougher rules on trading stock index futures and foreign exchange derivatives yesterday. The central bank will require reserves to be set aside for purchases of all currency derivatives from October, according to a document seen by Reuters, making it more expensive to bet on further depreciation of the yuan.

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Greece crisis or Raghuram Rajan's forecast! Here’s why it will not adversely impact India

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Single cap for FDI and FPI to boost foreign investments in country

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Budget 2015: Key reforms to stir up capital market in India

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