INDIA IN RECESSION, YET WHY MARKETS ARE BUOYANT? India entered an unprecedented recession with the GDP contracting7.5 per cent in the second quarter ended September, according to the government statistics, a milder than expected contraction excess of 8 per cent and a significant improvement from a record 23. 5 per cent contraction the previous quarter. The stimulus, along with festival season pent-up demand, has helped spur economic activity. Foreign portfolio inflows into equities are seen holding up as investors’ appetite for risk increases with news on vaccine, but going beyond the headlines, the market’s ability to hold on to the rally will ultimately be dictated by the spread of infections, investment spending, job creation and the impact on consumer demand. [COMMENT BY: Babu Das Augustine, Busines Editor]
Bloomberg