Jitendra Kumar Gupta's blog

The last year was reasonably good for the Indian markets. But, with macro headwinds picking up, 2011 could be different. Jitendra Kumar Gupta spoke with Tridib Pathak, senior director, equities, IDFC Mutual Fund, about his expectations from the markets in the current year, the concerns and the earnings outlook, among other things. Excerpts: What do you read into the sharp fall in the markets in the last couple of trading sessions? And, to what extent will this correction continue? The correction is largely due to domestic macro factors led by high inflation and further expectations of interest rates going up. Also, the fact that the current account deficit and crude oil prices are high. If inflation and international commodity prices don’t come down fast and if we (India) are forced to increase interest rates further, then it could have an impact on growth, leading the markets lower.

Send me your feedback or suggestions at jitendragupta2001@gmail.com Indian equity markets’ risk premium, which is used to gauge how much additional returns investors want from the markets over and above the risk-free rate of return, is on upward trend due to increasing concerns over interest rates, commodity prices, political uncertainty and rising crude oil prices. Following these events, research houses, especially international, have increased their equity risk premium for the Indian markets, which now stands at about 6-8 per cent compared to around six per cent at the start of the year. In the light of these events, the cost of equity, too, has gone up and the markets which were seen to be in fair value zone are now perceived to be expensive.

'Sugar output may remain in line with projections' Jitendra Kumar Gupta / Mumbai http://www.business-standard.com/india/news/qa-peter-baron-international-sugar-organisation/424733/ International sugar is trading at a 30-year high due to several supply-side issues. To understand the sector’s global and domestic concerns, Jitendra Kumar Gupta spoke with Peter Baron, executive director, International Sugar Organisation (ISO), which closely tracks global developments pertaining to the industry Sugar prices rose to a 30-year high in New York, led by worries over a cyclone in Australia, the third-largest exporter. Also, India may not export sugar, contrary to what was expected. In this light, what is your view of the global supply and demand for this and the next season? Fundamentals remain tight. ISO plans to release its second revision of the world sugar balance estimates for 2010-11 by the end of February. Preliminary figures show a further reduction in the gl