Risks to Indian Stock Market

The cover story published in the previous issue regarding the importance of long-term investing was a real eye-opener regarding the patience and grit needed to earn handsome returns in the equity markets over a long term. Can you brief regarding what is the current biggest short-term and medium-term risk to the Indian stock market?

- Aditya Kadam

Editor Responds: Thank you for the kind words and we are glad that you liked the cover story published in the previous issue. Clearly, in the very short term any further escalation of the Russia-Ukraine crisis can lead to a few more expected reactions. But from a medium term as well as more structural perspective, one of the crucial challenges is to understand the impact of the US Federal Reserve and other central banks increasing the interest rates and winding of other quantitative easing programmes. Additionally, the impact of inflation and increasing raw material cost on profit margins need to be analysed. We hope we have answered your query. Keep writing to us.