End of U.S. Stimulus Program May Hit Indian Stocks Severely


Bangalore: During a volatility index surge, Indian shares slipped more than 1 percent on 23 May, 13. The situation rose as the U.S. stimulus programme may wind-down soon and a feeble China manufacturing survey sparked worries that foreign investors might end their current buying binge, reports Abhishek Vishnoi of Reuters.

Federal Reserve Chairman Bernanke's suggestion to purchase bonds could be balanced if U.S. economy improvements overcome the falls, with Asian shares also affected badly, along with SBI drooped after generating unsatisfactory quarterly revenues.

Analysts have presaged that a possible early wrap-up of the U.S. stimulus programme could hit Indian stocks roughly as foreign institutional investors have been potential buyers for 25 successive sessions.

Again, analysts also predicted that possibilities of the Reserve Bank of India lowering interest rates in June could help boost up shares.

"Worries about outflows may persist for the next few days but people would buy into declines," said G. Chokkalingam, chief investment officer, Centrum Wealth Management.

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