Globally - The last quarter of the US is negative GDP growth
US is about to enter into a technical recession as last quarter was negative GDP growth and this quarter may again be negative
Is India decoupled significantly - Yes to a large extent but some sectors are strongly coupled such as IT
- Young population
- Consumption-driven economy
- Large RBI chest - If RBI doesn't defend INR
So, everything depends on how fast the mop-up of liquidity happens by regulators? The froth of liquidity is still very high. So, what are good indicators of this speed?
Leading indicators, not lagging indicators - -Keep a tab on Fed Balance Sheet as well as other important global peers
Which sectors will be bad to enter into ?
Discretionary (high beta) - Banking, IT, 4 wheeler
Good to enter
- Consumption - 2-wheeler, staples
- Value-Oriented sectors - Pharma, Energy,
If inflation still remains out of control - Gold is good insurance against global turmoil
Demand for real estate will definitely go down with the recession but part of this will be countered with the inflation froth
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