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<ul><li>While the market seems to be focusing on the brighter side, here are some triggers impacting the economy and markets that need to be noted.</li><li>From expectation of low monsoon to decline in <keyword id="46211" type="General" weightage="20" keywordseo="auto-sales" source="Orion">auto sales</keyword> there are various factors indicating a slowdown.</li><li>Meanwhile, Indian stock markets are continuing to hit record highs with growing liquidity in the market.</li></ul>While the market participants seem to be enjoying the euphoria of frequent record highs, there are some concerning triggers to be noted. While data has shown a <a href="https://www.businessinsider.in/policy/economy/news/opinion-indias-economy-may-be-growing-faster-than-expected-as-the-second-wave-of-the-pandemic-was-less-damaging-than-most-had-feared/articleshow/85811841.cms">better-than-expected recovery</a> in the April-June quarter, the economy is not back to the level it was before the pandemic. Between agriculture and automobile manufacturing, nearly two-fifth of the country’s economy is in doldrums. But the Nifty is still hovering around its <a href="https://www.businessinsider.in/stock-market/news/nifty-50-hits-historic-high-and-tops-17000-points/articleshow/85791229.cms">record high</a> that it hit on August 31. Here are some of the triggers to take notice: Monsoon deficit Poor rains in August have widened the monsoon deficit in the country. The India Meteorological Department (IMD) has indicated that the overall monsoon is likely to be at the ‘lower end of the normal’ in the country. Weak monsoons have a cascading effect on the agriculture segment, which makes for 20% of India’s gross domestic product (<keyword id="35050" type="General" weightage="20" keywordseo="gdp" source="Orion">GDP</keyword>) and supports the livelihood for more than 100 million people, directly or indirectly, according to NABARD All India Rural Financial Inclusion Survey 2016-17. The impact of less-than-expected rains reflected in the decline in tractor sales of some of the manufacturers like Mahindra &amp; Mahindra and Escorts in August compared to the month before it. Tractor sales in some of these auto makers dipped in August. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Tractor sales </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Month-on-month growth </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Year-on-year growth </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Mahindra &amp; Mahindra </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-21.60% </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-12.70% </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Escorts </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-13.30% </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-21.70% </td></tr></tbody><tbody></tbody></table> Broking firm CLSA reportedly expects a month-on-month decline of 18% for tractors in Q2. A report by JM Financial indicates that these slowing trends may revert soon. “The irregular pattern of rainfall in July-Aug 2021 however impacted agri-related investments including tractor sales but the overall growth trend is likely to revert back, as our checks suggest,” said the report. Declining auto sales Auto sales in August 2021 saw a month-on-month decline in volumes across most segments as automobile makers cut production amid a worsening global chip shortage. Auto companies’ growth counts in a major way as it contributes 7.1% to the country’s GDP. Analysts expect the slowdown in vehicle sales to continue in coming months as auto part manufacturers face semiconductor shortages. The COVID-19 pandemic has reportedly driven up demand for semiconductor chips that are used in cars and computers and so on. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Auto makers </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Month-on-month growth </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Maruti Suzuki </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-19.55% </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Tata Motors </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">4.25% </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">M&amp;M </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-23.20% </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Hero MotoCorp </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">5.77% </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Bajaj Auto </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">-8.35% </td></tr></tbody><tbody></tbody></table> “Semiconductor availability remains a challenge for most original equipment manufacturers (OEMs) and will lead to a demand-supply mismatch in the upcoming festive season as channel inventory is already below normal,” said a report by BOB Capital Markets. Analysts at broking firm CLSA reportedly see further month-on-month decline for passenger vehicles, commercial vehicles and tractors. Fall in government spending Government spending that supported GDP growth since the start of the pandemic has started to come down. Government expenditure declined 4.8% in the June quarter of 2021. “Government spend this year would likely be in the form of transfer/subsidies payments, with no material contribution to GDP,” said Madhavi Arora, Lead Economist, Emkay Global. Weak consumer demand The Reserve Bank of India (RBI) data for August shows that the consumer confidence remained weak and at an all-time low due to lower incomes and higher level of price. “Driven by substantial improvements in the outlook for general economic situation and employment scenario after the waning of the second wave of the COVID-19 pandemic, the future expectations index (FEI) returned to optimistic territory; respondents placed higher confidence on household income going forward,” said RBI’s consumer confidence survey. Signs of rising COVID-19 cases Rising COVID cases is another risk haunting the economy with fear of an imminent third wave. On September 2, India reported 47,092 new infections, the biggest single-day rise in two months. About 509 deaths were recorded during the past 24 hours, according to the Health Ministry. Moreover, resurgence of infections in countries like the US are seens as signs of another wave for other countries. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/zomato-is-shutting-down-its-singapore-and-uk-based-subsidiaries/articleshow/85858611.cms">Zomato is shutting down its Singapore and UK-based subsidiaries</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/common-financial-mistakes-to-avoid/articleshow/85856175.cms">Common financial mistakes to avoid in your 30s</a>

Sobering signals that Indian stock markets may be ignoring in this euphoria

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="https://static-ssl.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/category/chart-of-the-day"></a></td><td><a href="http://www.businessinsider.com/average-stock-in-bear-market-2014-5"></a></td></tr></tbody></table></div>India's BSE Sensex hit a record high of 23,572.88 Monday, rising as much as 2.5% on the back of <a href="http://www.businessinsider.com/r-indian-exit-poll-shows-modi-led-coalition-set-to-win-election-2014-12">exit polls</a> that show that Narendra Modi's Bharatiya Janata Party (BJP) will win India's general elections.
A lot is being expected of opposition leader Modi, after a Congress party led coalition government has seen India's GDP growth at ten-year lows. Morgan Stanley Investment Management's <a href="http://www.businessinsider.com/ruchir-sharma-on-indian-elections-2014-5">Ruchir Sharma</a> has pointed out that Modi could win even if two-thirds of India didn't vote for him.
Of course one should remember that Indian polls have been very wrong in the past.
In 2004, most polls had forecast that the incumbent party would return to power, but JP Morgan's Toshi Jain pointed out in a note published last month, that the incumbent won far fewer seats than expected and "the Sensex crashed 11% the day after the results and the rupee lost 3% of its value in the election month."
At the time the error was blamed on the fact that polls hadn't fully captured the mood in rural India. But in 2009, the incumbent won more seats than expected, and markets didn't anticipate this move. "Equity markets rallied whopping 17% in a day, triggering circuit-breaker and the rupee surged 4% in the election month," wrote Jain.
Jain has pointed out that the existing forecasting challenges in India have only been made more complex by the emergence of the "Aam Aadmi Party whose success in the recent state elections in Delhi was underestimated."
So, we'll keep our eyes peeled as the votes are counted on May 16.
Here's a look at how the BSE Sensex has traded:
<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="YahooFinance/Business Insider" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/5370d980eab8ea0a672b039f-960/sensex-1.jpg"></a>YahooFinance/Business Insider</div></div></div>

CHART OF THE DAY: The Indian Stock Market Is In Love With Modi

July and August had been bumper months for me. I netted Rs 41,000 in jobbing commissions in July and Rs 46,000 in August. And yet, I was disappointed for not having been able to hit the Rs 50,000 mark. Each month I took Rs 25,000 out of these profits home, depositing the rest with my employer, with the intention of taking bigger bets when the opportunity arose. 
 <keyword id="1336864" type="UNKNOWN" weightage="20" keywordseo="Bauji">Bauji</keyword> and Ma were awestruck when I handed them my earnings. Bauji had some idea about the stock market and its fickle ways, but he found it hard to believe that a 23-year-old could make Rs 25,000 two months in a row. 
 
‘I hope you are not doing something wrong, Lalchand,’ he told me one evening after dinner. 
 ‘No Bauji, every rupee has been earned the hard way. And this is just the beginning. With my efforts and God’s grace, we should be able to move to <keyword id="6354719" type="COMPANY" weightage="20" keywordseo="Ghatkopar">Ghatkopar</keyword> in two years’ time,’ I said. 
 I could understand his concerns; my wayward ways during our days in <keyword id="6364709" type="CITY" weightage="20" keywordseo="Bhandup">Bhandup</keyword> were still fresh in his memory. 
 ‘But tell me, <keyword id="203128" type="PERSON" weightage="20" keywordseo="Lala">Lala</keyword>, if you can make Rs 25,000 two months in a row, you could also lose that much, isn’t it?’ he asked. 
 
‘True, that’s why I pre-decide the quantum of loss I can bear and stay within that limit. If I exceed that, I am likely to get fired from my job,’ I said. 
 Unlike me, moving into a bigger house was not Bauji’s priority. <keyword id="6358149" type="PERSON" weightage="20" keywordseo="Satish">Satish</keyword> had enrolled for BSc that year as his HSC score was not high enough to get him seat in a good engineering college purely on merit. And we lacked the resources to pay for a seat in the management quota. We could have just about managed that, but Bauji was not certain if the investment would be worth the money. But now that I was making decent money, <keyword id="314387" type="PERSON" weightage="20" keywordseo="Babuji">Babuji</keyword> saw a chance to realise his cherished dream to see at least one of his children become an engineer. 
 
*** 
 
Thanks to my unusually long winning streak for the last couple of years, people in corporate circles began to know me. By that, I mean executives on the treasury side, such as chief financial officers. I found some of the fund managers too becoming more approachable now. Thankfully, since most of my gains came from short term trades and not long term investments, I was unknown to the media. I was perfectly fine with that since I had no desire to be known beyond my professional circles. I slowly began to get invites to parties of the rich and famous, which I refused without a second thought. Promoters began to send feelers to me to help boost their share price in return for a cut. At times, there would be offers to hammer a rival company’s shares. I had been approached in the past too with such requests, but the pedigree of companies that were now seeking my services was a few notches higher. 
 
I have helped quite a few promoters to ramp up their stock prices, but as a rule I never invest in their shares. I have to trade in their stock for a certain period when I am managing its price, but my association with the stock ceases once I have fulfilled my commitment to them. It is good if promoters are mindful of their stock price; that way they may not want to do something rash that will upset the market or their key shareholders. But it is a problem if promoters are obsessed with their stock price. To me it is a clear indication that they are not focusing their time and energy on their main business. And that is a recipe for disaster. Promoters often forget is that a healthy share price flows from the strength of their core business and not the other way round. 
 
*** On February 11, the <keyword id="6484188" type="CITY" weightage="20" keywordseo="Sensex">Sensex</keyword> topped 6,000 for the first time ever, but closed below that psychological level. That was a Friday, and we celebrated the landmark over drinks at the <keyword id="1271983" type="UNKNOWN" weightage="20" keywordseo="Harbour-Bar">Harbour Bar</keyword> in <keyword id="28297" type="COMPANY" weightage="20" keywordseo="taj-mahal-palace">Taj Mahal Palace</keyword> overlooking the Gateway of India. There were about a dozen of us. After the third or fourth peg, everybody present agreed that the market was absurdly overvalued and that it was time to sell out. 
 After we broke up, <keyword id="3983561" type="UNKNOWN" weightage="20" keywordseo="govind-bhai">Govind Bhai</keyword> and I had a short stroll by the seaside. There was a slight nip in the air, even as winter was in retreat. 
‘You know, Lala, every time people attend a funeral, they become philosophical and return home promising to become a better human being the following day onwards. But after a good night’s sleep they are back to being their usual selves. 
 
Govind Bhai said. ‘I am sure the same goes for all those who tonight vowed to reduce their positions after a few pegs. If anything, they will buy more as prices rise.’ 
 
The following Monday, the Sensex hit a new peak of 6,150 intra-day, but again closed below 6000. By now the bulls were delirious with excitement and buying stocks at whim, confident that the index would hit 7,000 by the end of the month. I was surprised to see some of the most level-headed fund managers I knew behaving like traders out to make quick buck. 
 
I am embarrassed to tell you what my paper wealth had grown to by the last week of February. All I will say is that it was substantial enough for me to have lost count of it. 
 ‘Lala, has it occurred that you must have made more money than <keyword id="1671" type="PERSON" weightage="20" keywordseo="Shah-Rukh-Khan">Shah Rukh Khan</keyword> over the last one year?’ <keyword id="32467" type="PERSON" weightage="20" keywordseo="Monk">Monk</keyword> remarked the day after the <keyword id="6358021" type="PERSON" weightage="20" keywordseo="budget">Budget</keyword>, when a group of us had gathered at a restaurant. I mentally calculated my net worth, and was flattered to realise that Monk was right after all. 
 
‘I never thought of it that way, but I guess it must be true,’ I said, both delighted and embarrassed at the same time. ‘Of course it is true, Lala. Tell me something, why are you still working after having made so much money?’ Monk asked with a grin. ‘For the same reason that you come to work every day despite having made more money than perhaps <keyword id="4984" type="PERSON" weightage="20" keywordseo="Sharukh-Khan">Sharukh Khan</keyword> and <keyword id="6355923" type="PERSON" weightage="20" keywordseo="Aamir-Khan">Aamir Khan</keyword> put together,’ I said. 
 
My repartee drew laughter from everybody at the table. I thought I saw a flash of anger briefly flicker in Monk’s eyes before he joined the others in the laughter. 
 
(Excerpts from 'Bulls, Bears and Other Beasts: A Story of the Indian Stock Market’ ) 
 
'Bulls, Bears and Other Beasts: A Story of the Indian Stock Market’ is written by <keyword id="330196" type="PERSON" weightage="20" keywordseo="Santosh-Nair">Santosh Nair</keyword>, published by <keyword id="664635" type="UNKNOWN" weightage="20" keywordseo="Pan-Macmillan-India">Pan Macmillan India</keyword>. The author is the editor of <a href="http://www.moneycontrol.com">Moneycontrol.com.</a>

You Searched For "indian stock market" and got 3 results

Sobering signals that Indian stock markets may be ignoring in this euphoria

Bhakti Makwana

CHART OF THE DAY: The Indian Stock Market Is In Love With Modi

Mamta Badkar

The Bulls, Bears and Other Beasts: A Story of the Indian Stock Market

BI India Bureau

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