May was turgid with pessimism for equity markets world over. Even Facebook Inc’s initial public offering, touted to be the largest in the US, was not a success and the bad news from Europe just does not end. In the US, the economy is trudging along but data isn’t too cheery. Back home, the shockingly low fourth-quarter gross domestic product (GDP) growth, among other things, was a big dampener.
In France, voters elected socialist Francois Hollande over the controversial reign of Nicholas Sarkozy and in Greece, too, voters voted out austerity. Whether the new leaders will be able to effect a change remains to be seen but as of now uncertainty on the future course of events has increased. GDP data from the region showed that the German economy’s growth has managed to keep the rest of the region out of recession.
Indian equity funds came into view as growth forecasts were downgraded in the light of political and economic uncertainty. In India there seems to be no respite from high prices as the latest consumer price index (CPI) data shows that urban inflation is stubbornly above 10%; the inflation based on combined CPI is at 10.36%. Inflation based on wholesale price index, however, was at 7.23%.
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Experts suggest that fuel and food-led inflation will continue to remain high and can’t really be tackled by the monetary policy. Petrol prices were raised by Rs 7 per litre across the country and that caused much furore; a small rollback of Rs 2 will not help ease matters much. There is expectation of similar hikes in diesel and liquefied petroleum gas soon.
Global crude prices, on the other hand, have been declining on the back of a slowing European economy.
Graphics by Sandeep Bhatnagar/Mint
Compiled by Lisa Pallavi Barbora
