Brexit, a referendum on UK, whether to stay in the European Union or not, is finally over with 52% voters demanding an EXIT (48% is in favour of European Union). Sensex which opened with a gap of 1000 points today, with some recovery closed with 600 points down. International markets went for a full hara-kiri with 5% to 10% dive.
Will it affect India?
With European Union (EU) losing one of its members, India too can feel the heat. Rupee may depreciate because of the double effect of foreign fund outflow and dollar rise, and may lead to increase in petrol and diesel prices to an extent. The government then may want to reduce additional excise duty imposed on fuel when it was on a downward trajectory. This will
increase fiscal deficit, unless revenue increased. Prices of gold, electronic goods, among others may increase. On the other hand, cheaper rupee will make Indian exports, including IT and ITeS, competitive.
Stock Markets
Currencies everywhere in the world are in jitters on the back of exit impact, with Selling-off happening or expected in most of the markets. As per most of the Indian Broking houses, panic will pass in a couple of days. Long-term impacts could be bigger, which will take the UK two-to-three years to complete the whole process and hence the impact in near-term for India will be minimal.
India is bound to recover with expectations of good monsoon and recovery in demand. If market falls, then that is a buying opportunity, says most of the Indian Broking houses.
Finally, my Investments
Stay Put & don’t panic, as most of us have invested for a long term tenure.
Such events may impact your returns in the near future or todays calculation, but we have seen events worse than this and investors who follow the path of discipline, based on Life Goals plan, always comes out winners with fabulous returns!!!
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His interests include birding & adventure activities.