What began as a reaction to a higher consensus weighting on Indian equities and weak momentum in corporate earnings is turning into a correction that could see India’s benchmark indices ending in the red for a second consecutive month. Global factors like a contagion risk from Greece’s exit from the euro zone and a possible fund outflow following a rate hike by the US Federal Reserve are weighing on the performance of some of last year’s best performing markets including India. Apart from global factors, several domestic developments including the government’s inability to convince the Opposition on the amended land Bill and, crucially, its insistence on levying a minimum alternate tax (MAT) on foreign portfolio investors are adding to the selling pressure.
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