Good monsoon expected to be a game changer for economy, stocks

India Infoline News Service | Mumbai | May 13, 2017 12:35 IST

India is primarily an agrarian economy and heavily dependent on monsoon rainfall.

Rain forest in mountains
India is primarily an agrarian economy and heavily dependent on monsoon rainfall. The contribution of agricultural sector to country’s GDP is 15%. Around 40% of the rural economy is directly dependent on the monsoon.
 
The Indian Meteorological Department (IMD) has forecasted above average monsoon for this year and may bring 100% rainfall more than its earlier prediction. A good monsoon is a blessing for the agricultural sector, which will further boost the farm output, believe experts. Several government-backed are likely to back the growth of the country's economy. 
 
It is also anticipated that good monsoon rains this year will boost the rural markets and will allow the Reserve Bank of India to cut interest rates in the coming days. The International Monetary Fund (IMF) recently forecasted India’s growth at 7.2% in the financial year 2017-18 and 7.7% in 2018-19, mentioned a national news portal.
 
The forecast of normal monsoon will impact the sentiments of the market participants and the bull will continue to move forward, believes market pundits. The stocks of agriculture dependent sectors such as consumer durables, FMCG, fertilisers will also rally.
 
This may result in positive earnings for the companies and the stock prices also may witness a rise in the coming days, mentioned a national news portal.

Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.

 

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