The Sensex scaled the 62,272 peak and shows no signs of faltering. Analysts believe that a low-interest rate regime and the sustained flow of money of high net worth traders and retail investors will keep the flag flying. Amid the buoyant sentiment and increased activity, valuations have reached elevated levels and demand consistent delivery on earnings expectations.

Sensex and Nifty rallied over 1 per cent to close at lifetime highs following gains in IT, banking and oil stocks and firm trends in global markets on expectations of slower rate hikes by the US Fed. Given the rich valuations, one cannot ignore intermittent volatility.

The market had been performing well over the last few quarters owing to huge liquidity, upward earnings cycle, post-Covid revival and earnings expectations.

CK Subramaniam

Mumbai

The DeMo pain

Demonetisation was designed as much for macho effect as for tripping up the Opposition on eve of UP elections given the cash driven campaigns of every political party. UP was won but the economy was lost.

There had been a miscalculation on the extent of black-money per vis-a-vis tax avoidance, seen in the return of the almost entire value of DeMo currency. The informal sector and small industry was starved of non-formal credit even as the formal credit channels got frozen with huge NPAs and banks.

DeMo as a remedy to black money, proved a hurried and shoddy monetary dialysis. A professional analysis of this episode will elicit lessons of immense benefit.

R Narayanan

Navi Mumbai

Reviving exports

Global recession appears to be truly on its way with Ukraine war showing no signs of ending (“Global recession fears may impact exports”, November 25). Amidst the global economic crisis, India needs to think out of the box and reimagine the export sector.

China’s manufacturing slowdown due to Covid curbs opens up a new opportunity in the export of consumer electronics, etc. Government needs to encourage manufacturing of such goods by offering finance and incentives.

The government must also take policy measures to make Indian goodsglobally competitive. Textiles and ready-made garment sectors are one of the India’s strengths, but unfortunately, exports of this sector also are falling.

Exports of textiles and garments can be scaled up, if they are rightly priced and made globally competitive. Pharmaceuticals is another sector where a little push by the government can boost the sectoral exports.

Kosaraju Chandramouli

Hyderabad

Getting forecasting right

This refers to the report ‘Frequent revisions, a challenge to monetary policy formulation’ (November 25). RBI’s monetary policies go much beyond the changes in base rates which attract media, stakeholders’ and analysts attention.

RBI Deputy Governor Michael Patra was referring to the nature of inadequacies in the data on which the whole exercise of monetary policy formulation was dependent besides the external uncertainties.

The only comfort for RBI is the availability of an efficient back office for the Monetary Policy Committee in the RBI’s Economic and Policy Research Department.

Other organisations like NSSO also need to upgrade their skills on an ongoing basis.

MG Warrier

Mumbai

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